Shulou(Shulou.com)11/24 Report--

Beijing, September 2 (Xinhua)-- famous chip designer ARM has taken its big customer Qualcomm to court, which has led to a direct conflict between the two most valuable semiconductor companies, which makes people doubt their future cooperation.

ARM sued the big customer Qualcomm.

At the heart of the conflict is Nuvia, a chip start-up that Qualcomm bought for $1.4 billion last year. ARM claims that Nuvia uses ARM's license to develop chip designs and cannot be transferred to Qualcomm without consent.

Lawsuits over intellectual property rights and contracts are common in the semiconductor industry. But the lawsuit between ARM and Qualcomm is a major conflict over chip design capabilities. This could have a significant impact on chip startups and open the way for an open source architecture that is an alternative to ARM.

In fact, the relationship between ARM and Qualcomm is not as good as it seems. They are partners, but they are also competing fiercely in private. The lawsuit also reveals the delicate relationship between the two companies.

Partner and foe ARM architecture chips have been growing in recent years because they are more energy efficient than x86 architecture chips produced by Intel and AMD. In 2021, more than 29 billion ARM architecture chips were shipped, including the main chips used by Apple's iPhone, Mac and iPad.

Companies such as Apple obtain instruction set Architecture (ISA) licenses from ARM and then design their own physical processor circuits to execute ISA instructions. Historically, other companies such as Qualcomm have bought the right to use the complete core design, the Cortex kernel, from ARM. ARM reports that the company earned $2.7 billion in licensing and royalties in 2021.

ARM Cortex chip

However, there is a conflict between ARM's architecture licensing business and its own CPU design business, because Qualcomm and other companies licensed by ARM architecture develop their own processors to compete with ARM's CPU design business. MediaTek, for example, uses ARM's CPU design.

When Nvidia announced its $40 billion acquisition of ARM in 2020, the chip industry immediately split into two camps: MediaTek, Broadcom and Marvell, which use ARM CPU designs, and Qualcomm, which developed its own processors, and Intel opposed it. Among them, Qualcomm's opposition is the loudest.

Late last year, ARM stressed in a document outlining the acquisition that while Qualcomm is the licensee of the ARM architecture, the company uses its own team of engineers to develop private CPU designs rather than ARM's CPU designs, and there is direct competition between the two sides.

"licensees of ARM architectures, such as Qualcomm, compete directly with licensees such as MediaTek that use ARM's own CPU designs. As a result, these architecture licensees will benefit from the decline in the competitiveness of ARM designs and from ARM's reduced investment in its own engineering team. If ARM is forced to remain independent and has to scale down research and development to please the public market, they will also benefit." ARM explained.

Ann Chaplin, general counsel of Qualcomm, said in a statement that the dispute deviated from the "long-term and successful relationship" established between the two sides. "ARM has no right to interfere in the innovation of Qualcomm or Nuvia, whether in contract or otherwise. ARM ignores the fact that Qualcomm has extensive and comprehensive licenses to cover its custom-designed CPU, which we believe will be recognized." Chaplin said.

ARM said in a statement that it had "no choice but to sue Qualcomm and Nuvia to protect our intellectual property rights and business and to ensure that customers can legally use ARM architecture products."

Qualcomm's expansion has been hampered by Qualcomm's acquisition of Nuvia because it wants its chips to outperform off-the-shelf ARM processor designs, especially to compete with Apple's efficiently customized ARM core. Nuvia, a startup founded by former Apple and Google engineers, was developing a server chip with a customizable kernel based on architecture licensing. It also uses the core design of ARM.

Qualcomm CEO introduces Snapdragon chip

After acquiring Nuvia, Qualcomm placed Nuvia at the heart of its smartphone and PC strategy, using the core of Nuvia to improve the performance of PC chips, allowing it to launch laptop processors as soon as 2023 to better compete with Apple's M-series self-developed chips.

But ARM said that although Qualcomm has an architectural license, it needs the consent of ARM to purchase and use Nuvia's custom core design. ARM terminated Nuvia's license in March this year after the two sides failed to communicate.

Alternative architecture if ARM's argument is supported in court, Qualcomm's overall chip strategy could change. But Qualcomm may have another way to go.

Karl Freund, founder and analyst of Cambrian artificial intelligence research firm, speculated that Qualcomm might try to use RISC-V, an open source alternative to the ARM instruction set. ARM told regulators in December that "the momentum of RISC-V is accelerating" and that established suppliers are increasingly using it to replace ARM's instruction set. A few startups are currently developing the CPU kernel based on the RISC-V architecture, but it has not yet been used in popular smartphones, all of which currently use ARM architecture chips.

However, ARM's efforts to strengthen intellectual property ownership to long-term partners may prompt companies that develop custom ARM cores to reconsider open source alternatives.

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