Qualcomm: New ARM business model is turning the smartphone market upside down

Qualcomm documents from a court case indicate that ARM plans to charge higher licensing fees in the future and ban certain CPU designs.

The British chipmaker ARM apparently wants to change the business and licensing model in order to earn more money in the long term. Those who would suffer would be companies that make ARM processors, and use them in their devices such as smartphones, and users (due to higher prices).

The possible changes emerge from the court dispute between licensee Qualcomm and ARM. A new letter of defense from Qualcomm suggests that ARM has already contacted Qualcomm customers and wants to collect usage fees for ARM technology in every single chip used from 2025 (royalties).

Without their own license, manufacturers are no longer allowed to sell smartphones, tablets or other devices with ARM technology. This would apply, for example, to Samsung’s Galaxy smartphones with Snapdragon CPUs, Honor, Oneplus, and Xiaomi. The new letter of defense discovered the Semianalysis website.

In addition, ARM apparently wants to prohibit the coupling of ARM cores with function blocks from other suppliers – such as GPUs, AI accelerators, or image processors – as soon as existing license agreements expire. Qualcomm should then no longer integrate its own AI accelerators and image processors into the Snapdragon Systems-on-Chip (SoCs) as long as they contain standard Cortex cores.

Samsung should no longer develop Exynos CPUs with an integrated AMD GPU and Mediatek no longer with GPUs from Imagination Technologies. Apple and Nvidia would be fine, at least for the time being: Apple designs its own ARM cores anyway and only licenses the ARM architecture. Qualcomm intends to do this with Nuvia cores in the future, but it will take more time. Nvidia, on the other hand, secured a far-reaching 20-year license as part of the failed ARM takeover.

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