The dispute centers on alleged contract breaches. Qualcomm says Arm withheld chip-testing tools and leaked a 2024 termination warning; Arm denies wrongdoing.
Qualcomm claims the alleged leak hurt a Meta deal. Qualcomm says Meta became concerned about its access to Arm technology and that the deal’s value fell by $170 million. Arm argues Meta’s shift toward AI glasses—not the leak—drove changes to the deal.
Billions in potential royalties are at stake. Qualcomm is seeking to stop paying royalties for up to five years. The judge is considering whether that remedy is allowed, which could limit Qualcomm to smaller damages.
The companies also disagree over future technology pricing. In a related hearing, Qualcomm’s CEO challenged Arm’s proposed royalty increase for newer architecture, while Arm questioned whether Qualcomm’s older pricing terms fairly reflect today’s much larger chips.
The trial is another chapter in a long-running conflict. The five-day jury trial follows Arm’s 2022 lawsuit against Qualcomm and Qualcomm’s key legal victory in 2024; their licensing agreement runs through 2033.
Qualcomm and Arm clash over alleged leaks, Meta deal losses and soaring chip royalty rates
Qualcomm and Arm are back in court in Delaware over allegations that Arm withheld chip-testing tools and leaked a warning about possibly ending Qualcomm’s license. Qualcomm says the leak disrupted a near-final Meta deal, reducing its value by $170 million. Arm disputes this, saying Meta changed its plans from VR headsets to AI glasses.
Qualcomm is also seeking to pause royalty payments to Arm for up to five years, potentially worth billions. Judge Maryellen Noreika is considering whether that request can proceed.
A related dispute concerns Arm’s proposed 1,800% royalty increase for its next architecture. Qualcomm argues that a 2013 deal caps fees at $1.88 per chip, while Arm says that arrangement is outdated for today’s high-core-count chips.
Ali Merchant is a seasoned financial markets professional specializing in technical analysis, treasury & capital markets, trading, research, and fund management. He is Strategic Advisor at Musaffa and Founder of TWT Learning, which provides education, research, and advisory services to fund and hedge managers and family offices. Ali has traded FX, FX options, US stocks & options, indices, commodities, oil and metals futures, and holds a CMT charter with memberships in AAPTA and CMT, US & Canada. He has worked with ABN AMRO, Thomson Reuters/Refinitiv, MAK Allen & Day Capital, and Bridge Information Systems, produced TA reports for Bloomberg and Reuters, and trained 2,000+ market participants across North America, the GCC and Asia.
