Qualcomm, Arm resume legal battle over chip technology

Chipmaker Qualcomm (QCOM.O) and chip technology company Arm Holdings (O9Ty.F), which have long been at odds, will return to court on Monday as Qualcomm accuses Arm of withholding chip-testing tools that were required under their contract.

Qualcomm also alleges that Arm leaked to the media its 2024 threat to terminate a key licensing agreement, harming negotiations over a chip deal between Qualcomm and Meta Platforms (META.O), Reuters reported.

In the lawsuit filed in a US federal court in Delaware, Qualcomm, one of Arm’s largest customers, is seeking to stop paying royalties to Arm for up to five years. The payments could potentially be worth billions of dollars.

However, Judge Maryellen Noreika is considering whether to dismiss that provision of the contract, which could leave Qualcomm able to pursue only a smaller amount in damages.

Arm, which is owned by Japan’s SoftBank Group (9984.T), has denied breaching the contract and argued that it did not cause damage to Qualcomm’s chip deals, which it described as speculative.

Arm has also argued that Qualcomm cannot seek damages over the leak of the termination letter because Qualcomm itself leaked non-public details of antitrust investigations into Arm to the media.

The five-day jury trial will represent another stage in the contentious relationship between the two companies.

Arm sued Qualcomm in 2022, alleging that Qualcomm had violated their contracts, but Qualcomm secured a key victory in 2024.

In a related bench trial, Noreika will also hear arguments over whether Arm has negotiated in good faith with Qualcomm regarding the next generation of Arm’s chip technology. Qualcomm’s agreement with Arm runs through 2033.

Qualcomm is a major supplier of chips for Android mobile phones but has expanded into other areas, including data center chips.

Arm has supplied fundamental chip-design technology to Qualcomm and other chipmakers, including Nvidia, for decades. However, it has increasingly become a competitor to those customers by developing chips of its own.