Arm-Qualcomm trial set to start over chip contract dispute

By Tom Hals and Max A. Cherney

WILMINGTON, Del. (Reuters) – The trial in a authorized battle between Arm (ARM) and Qualcomm (QCOM) that might disrupt a wave of synthetic intelligence PCs is ready to debut Monday in a Delaware courtroom.

A battle lasting greater than two years pits Arm, which licenses the basic expertise used to design chips, in opposition to Qualcomm, certainly one of its largest clients and a number one designer of cellular processors.

The jury trial is anticipated to start Monday with opening arguments and conclude Friday. Both sides has roughly 11 hours to current its arguments. The jury was chosen on Friday.

Anticipated witnesses embrace Arm Chief Government René Haas, Qualcomm CEO Cristiano Amon, and Nuvia founder Gerard Williams. Williams was a senior government at Apple’s chip unit and is presently a vp at Qualcomm.

The crux of the dispute is a contractual dispute over Qualcomm’s licensing settlement for using Arm’s mental property and its 2021 $1.4 billion acquisition of chip startup Nuvia, based by former Apple chip engineers, together with Williams.

Qualcomm used Nuvia’s designs to create new low-power AI PC chips launched earlier this 12 months that Microsoft and others say will assist the Home windows working system regain misplaced floor to laptops made by Apple.

Nuvia and Qualcomm every had licensing agreements with Arm however with completely different monetary phrases. To make use of designs based mostly on Nuvia expertise, Arm mentioned Qualcomm must renegotiate the phrases of the Nuvia contract.

Qualcomm mentioned its “well-established licensing rights” cowl all custom-designed central processing items (CPUs) and is “assured that these rights can be upheld.”

Arm argued that Qualcomm must be compelled to destroy the Nuvia designs and didn’t search damages. In keeping with Stacy Rasgon, an analyst at Bernstein, Qualcomm pays Arm about $300 million in charges per 12 months.

The British firm Arm belongs to the SoftBank group, which listed Arm in america in 2023.

(Reporting by Tom Hals in Wilmington and Max A. Cherney in San Francisco, modifying by Rosalba O’Brien)