Qualcomm CEO Christianano Amon told the company’s board that acquiring Nuvia directly would save up to $1.4 billion in annual Arm payments. This recognition is in Arm vs. Qualcomm Trialthe former claimed that the latter’s Snapdragon X chip released earlier this year infringed on its patents. according to ReutersAmon testified that he used this reason to justify Qualcomm’s $1.4 billion acquisition of Nuvia in 2021.
Qualcomm had a huge share of the smartphone processor market in the late 2010s, but the company believed it was falling behind Apple’s Bionic chips in performance because of its reliance on Arm designs. In addition, Amon also wants to challenge Intel’s dominance in notebook computers and mobile computing. But at that time, Qualcomm had no choice but Arm.
When Nuvia was founded in 2019 by a former Apple engineer who worked on smartphone processors, Qualcomm’s CEO saw a solution. At first, Amon tried to persuade Nuvia to build computing cores for the company. When that plan failed, he decided to do the next best thing and buy the startup outright.
According to reports, this strategy was difficult to accept by Qualcomm’s board of directors, especially since Nuvia had no products at the time and was mainly focused on developing server chips. Therefore, in order to gain access to the talent and design that Nuvia possesses, Amon told the company’s board of directors that the move could save Qualcomm $1.4 billion in Arm patent royalties per year. This theoretical number is based on the assumption that Qualcomm’s Snapdragon X processor will capture a huge share of the notebook market when it launches. In fact, Qualcomm Only 720,000 units were sold in the first full quarter on the market; Accounts for only 0.8% of the total market.
Arm argued that it missed out on $50 million in annual revenue because Qualcomm failed to renegotiate its contract with Nuvia after it acquired the company. Arm believes Qualcomm should destroy all Nuvia designs built prior to its acquisition. Qualcomm, on the other hand, claimed that its architecture licensing agreement with Arm fully covers all products it acquired under Nuvia, and that Arm took this move because it plans to design its own chips to compete with companies including Qualcomm. competition for customers.
Arm’s aggressive defense of its technology is understandable because its core business relies on licensing agreements. If Qualcomm can save at least $50 million per year from acquiring Nuvia, other Arm customers may follow suit, seriously threatening Arm’s business model. Still, there’s no guarantee which side the court will take. Closing arguments in the case are set to take place today, so both Arm and Qualcomm are waiting with bated breath for the future of Snapdragon X.