Qualcomm is asking a US federal court in Delaware to allow it to stop paying royalties to Arm for as long as five years, potentially putting billions of dollars in payments at stake in the companies’ escalating dispute.
During opening arguments, Qualcomm attorney Karen Dunn told jurors that the company was close to securing a deal with Meta when Arm notified Qualcomm that it had breached their architecture licensing agreement. Qualcomm alleges that the notice was subsequently leaked to Bloomberg News.
According to Dunn, the development unsettled Meta over concerns that Qualcomm could lose its Arm licence. By the time Qualcomm finalised its agreement with Meta, the commercial value of the deal had fallen by about $170 million.
“Delay is costly,” Dunn told the jury.
Arm offered a sharply different account. Its attorney Gregg LoCascio argued that Meta’s business priorities had changed independently, with the company moving more heavily toward AI-powered glasses while reducing its focus on virtual reality headsets. That shift, he said, prompted Meta to seek different financial terms for Qualcomm’s chips.
“They were not harmed in the least,” LoCascio argued.
The royalty issue could have major financial consequences for Arm. Qualcomm is seeking a five-year suspension of royalty payments, although Judge Maryellen Noreika is considering whether that contractual remedy should be removed. If it is struck down, Qualcomm’s potential recovery could be substantially smaller.
Dispute expands over Arm’s next architecture
The Delaware proceedings also include a separate bench trial concerning Arm’s negotiations with Qualcomm over the next generation of its chip architecture.
Qualcomm’s licensing agreement with Arm remains in force until 2033. Qualcomm CEO Cristiano Amon appeared during the bench-trial proceedings, where Qualcomm highlighted figures showing that Arm was seeking an approximately 1,800% increase in royalty payments between its ninth and tenth architecture versions.
Arm, meanwhile, challenged Qualcomm’s reliance on an older 2013 licensing arrangement that placed a royalty ceiling of $1.88 per chip for products containing at least five CPU cores.
During cross-examination, Arm’s attorney questioned whether such pricing made sense in today’s market, particularly as some data-centre processors now contain as many as 288 CPU cores.
The argument was framed around whether Qualcomm was effectively paying for five cores while receiving the benefit of hundreds under the older royalty structure.
Amon rejected that interpretation, saying he did not view the agreement that way.
The latest courtroom battle is the newest chapter in a long-running clash between the two semiconductor companies. Arm first sued Qualcomm in 2022, accusing it of violating its contractual obligations. Qualcomm secured an important win in an earlier phase of the dispute in 2024.
The current trial is expected to run for five days, while the separate bench proceedings will determine issues surrounding the companies’ continuing licensing relationship.
