A Delaware jury is hearing Qualcomm and Arm’s latest contract dispute, which centers on alleged withholding of chip-testing tools, a leaked termination threat, and Qualcomm’s bid to suspend royalty payments for up to five years. The trial began Monday and is expected to run five days. A related bench trial will address a separate question about Arm’s negotiations with Qualcomm.
Qualcomm alleges that Arm withheld chip-testing tools required under their contract, according to investing.com. It is also seeking to stop paying Arm royalties for up to five years, a demand that could be worth billions of dollars. U.S. District Judge Maryellen Noreika is considering whether to strike a contract term limiting Qualcomm’s damages, which could affect the potential cost of the case to Arm.
Qualcomm also alleges that Arm leaked its 2024 threat to terminate a key license agreement, harming discussions for a chip deal with Meta Platforms, according to the same report. Arm denies breaching the contract and says its conduct did not damage Qualcomm’s chip deals, WTAQ reported. Arm has also argued that Qualcomm cannot recover damages over the leak because Qualcomm itself disclosed non-public details of antitrust probes into Arm to the media.
The Companies Dispute Whether Arm Caused Harm
Qualcomm attorney Karen Dunn argued that Arm breached contracts in response to Qualcomm’s acquisition of Nuvia and undermined Qualcomm’s business relationship with Meta. She also said Qualcomm relied on Arm to honor its contractual commitments, according to the same account.
Arm attorney Gregg Locascio argued that Qualcomm was using the lawsuit as leverage in a business dispute and must show that Arm’s conduct caused actual harm. Locascio said Qualcomm had not been harmed, according to the report.
A Bench Trial Running in Parallel
A separate bench trial before Judge Noreika will consider whether Arm negotiated in good faith with Qualcomm over its next generation of chip technology. The issue could affect the companies’ future dealings; their current agreement runs through 2033.
This isn't the companies' first courtroom clash. Arm sued Qualcomm in 2022 alleging contract breaches tied to Qualcomm's 2021 acquisition of chip startup Nuvia, whose license agreements with Arm covered custom CPU core designs. Arm had argued that Nuvia's Architecture License Agreement and Technology License Agreement were not automatically transferable to Qualcomm and required Arm's consent and renegotiation, according to Futurum Group. Arm had sought destruction of Nuvia-derived chip designs and an injunction blocking Qualcomm from using, selling, or commercializing products built on the disputed technology.
Qualcomm came away with a key victory in that 2024 trial. Accounts of how the Nuvia-specific breach question was resolved differ: Futurum Group reported that a December 2024 jury returned a unanimous verdict finding Qualcomm had not breached any Arm agreement but deadlocked on whether Nuvia itself had breached its contract with Arm before Qualcomm's acquisition. A separate report from Data Center Dynamics states that a Delaware court ruled Nuvia did not breach its architecture license agreement with Arm. In SEC filings, Qualcomm has said its counterclaim seeks a declaratory judgment that it did not breach Nuvia's license agreements and that its acquired architected cores remain fully licensed under Qualcomm's existing Arm agreements, while Arm has sought specific performance requiring Qualcomm to cease using and destroy technology it says incorporates Qualcomm's custom Oryon CPU cores developed under the Nuvia agreement.
What the Earlier Trial Did—and Did Not—Resolve
According to Data Center Dynamics, the December 2024 Delaware trial ended in a mistrial after jurors deadlocked on whether Nuvia breached its Arm agreement. A later ruling found that Qualcomm had not breached its architecture license agreement. The earlier trial therefore left the Nuvia-breach question unresolved; the current jury trial concerns Qualcomm’s claims about testing tools, the termination-threat leak and royalty relief, while the parallel bench trial addresses Arm’s good-faith negotiations.
Why the Stakes Reach Beyond These Two Companies
Arm, which is owned by Japan's SoftBank Group, has for decades supplied fundamental chip-design technology to Qualcomm and other chip firms such as Nvidia, the wtaq.com report noted. Qualcomm itself has expanded beyond making chips for Android mobile phones into fields including data-center chips, while Arm has become a competitor to some of its own customers by releasing chips of its own.
Futurum Group's analysis notes that the outcome of this dispute could ripple across Arm's entire licensing ecosystem, not just its relationship with Qualcomm. The same analysis estimated Arm could lose roughly $50 million in annual revenue if Qualcomm were allowed to use Nuvia's designs under Qualcomm's existing licensing rates, underscoring why a five-year royalty hold worth potentially billions could carry a major sales impact for Arm.
