Qualcomm and Arm Return to Court in Dispute Over Chip Testing Tools and Royalties

Qualcomm and Arm returned to court on Monday, October 5, in the U.S. District Court in Delaware for a five-day jury trial, marking the latest chapter in their long-running legal dispute.

Qualcomm accuses Arm of withholding chip testing tools that were due under contract and of leaking to the media a threat from 2024 to terminate a key licensing agreement, which Qualcomm says damaged its chip deal with Meta. Qualcomm is seeking to stop royalty payments that could total billions of dollars for up to five years.

Judge Maryellen Noreika is considering whether to strike that part of the contract. If she does, Qualcomm may only pursue smaller damages. The judge also heard arguments on whether Arm negotiated in good faith with Qualcomm over next-generation chip technology. Their agreement runs through 2033.

In opening statements, Qualcomm attorney Karen Dunn said Qualcomm was on the verge of a deal with Meta when Arm notified Qualcomm of a breach of its architecture agreement, threatened to cut off licensing, and then allegedly leaked the notice to Bloomberg. Worried that Qualcomm would lose its Arm license, Meta saw the contract's value fall by $170 million. Arm attorney Gregg LoCascio told the jury that Meta actually pivoted toward AI glasses and cut investment in VR headsets, so Arm caused no harm to Qualcomm.

Qualcomm CEO Cristiano Amon testified on Monday. Qualcomm's lawyers cited a chart showing that licensing fees for Arm's architecture version 10 (ARMv10) were 1,800% higher than for version 9 (ARMv9). On cross-examination, Arm's lawyer pressed Amon on whether he wanted to keep the pricing from the 2013 architecture licensing agreement, which caps royalties at $1.88 per chip with at least five CPU cores. Arm noted that some data center chips now have up to 288 CPU cores and asked whether Amon believed Qualcomm should pay for only five cores and get the remaining 283 for free. Amon said he did not think so.

The trial is another phase in the tense relationship between Arm and Qualcomm. Arm sued Qualcomm in 2022 for breach of contract; Qualcomm won a key victory in 2024.