Arm Holdings is canceling a license that allowed longtime partner Qualcomm to use Arm intellectual property to design chips, escalating a legal dispute over vital smartphone technology.
Arm, based in the UK, has given Qualcomm a mandated 60-day notice of the cancellation of their so-called architectural license agreement, according to a document seen by Bloomberg. The contract allows Qualcomm to create its own chips based on standards owned by Arm.

The showdown threatens to roil the smartphone and personal computer markets, as well as disrupting the finances and operations of two of the most influential companies in the semiconductor industry.

Qualcomm sells hundreds of millions of processors annually — technology used in the majority of Android smartphones. If the cancellation takes effect, the company might have to stop selling products that account for much of its roughly $39 billion (roughly Rs. 3,27,890 crore) in revenue, or face claims for massive damages.

The move ratchets up a legal fight that began when Arm sued San Diego-based Qualcomm — one of its biggest customers — for breach of contract and trademark infringement in 2022. With the cancellation notice, Arm is giving the US company an eight-week period to remedy the dispute. 

Representatives for Arm declined to comment. A Qualcomm spokesperson said the British company was trying to “strong-arm a longtime partner.”

It “appears to be an attempt to disrupt the legal process, and its claim for termination is completely baseless,” the spokesperson said in an emailed statement. “We are confident that Qualcomm’s rights under its agreement with Arm will be affirmed.” 

The two are headed to a trial to resolve the breach-of-contract claim by Arm and a countersuit by Qualcomm. The disagreement centers on Qualcomm’s 2021 acquisition of another Arm licensee and a failure — according to Arm — to renegotiate contract terms. Qualcomm argues that its existing agreement covers the activities of the company that it purchased, the chip-design startup Nuvia.

Nuvia’s work on microprocessor design has become central to new personal computer chips that Qualcomm sells to companies such as HP and Microsoft. The processors are the key component to a new line of artificial intelligence-focused laptops dubbed AI PCs. Earlier this week, Qualcomm announced plans to bring Nuvia’s design — called Oryon — to its more widely used Snapdragon chips for smartphones. 

Arm says that move is a breach of Qualcomm’s license and is demanding that the company destroy Nuvia designs that were created before the Nuvia acquisition. They can’t be transferred to Qualcomm without permission, according to the original suit filed by Arm in the US District Court in Delaware. Nuvia’s licenses were terminated in February 2023 after negotiations failed to reach a resolution.

Like many others in the chip industry, Qualcomm relies on an instruction set from Cambridge, England-based Arm, a company that has created much of the underlying technology for mobile electronics. An instruction set is the basic computer code that chips use to run software such as operating systems.

If Arm follows through with the license termination, Qualcomm would be prevented from doing its own designs using Arm’s instruction set. It would still be able to license Arm’s blueprints under separate product agreements, but that path would cause significant delays and force the company to waste work that’s already been done. 

Prior to the dispute, the two companies were close partners that helped advance the smartphone industry. Now, under newer leadership, both of them are pursuing strategies that increasingly make them competitors. 

Under Chief Executive Officer Rene Haas, Arm has shifted to offering more complete designs — ones that companies can take directly to contract manufacturers. Haas believes that his company, still majority owned by Japan’s SoftBank Group Corp., should be rewarded more for the engineering work it does. That shift encroaches on the business of Arm’s traditional customers, like Qualcomm, who use Arm’s technology in their own final chip designs. 

Meanwhile, under CEO Cristiano Amon, Qualcomm is moving away from using Arm designs and is prioritising its own work, something that potentially makes it a less lucrative customer for Arm. He’s also expanding into new areas, most notably computing, where Arm is making its own push. But the two companies’ technologies remain intertwined, and Qualcomm isn’t yet in a position to make a clean break from Arm.

Arm was acquired in 2016 by SoftBank, and part of it was sold to the public in an offering in September of last year. The Japanese company still owns more than 80 percent of the Arm.

Arm has two types of customers: companies that use its designs as the basis for their chips and ones that create their own semiconductors and only license the Arm instruction set.

Qualcomm is no stranger to licensing disputes. The company gets a large chunk of its profit from selling the rights to its own technology — a key part of mobile wireless communications. Its customers include Samsung Electronics and Apple, the two biggest smartphone makers.

Qualcomm emerged victorious in 2019 from a wide-ranging legal fight with Apple. It also won a court decision on appeal against the US Federal Trade Commission, which alleged that the company was using predatory licensing activities.

© 2024 Bloomberg LP

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

Advanced Micro Devices said on Thursday it plans to start mass production of a new version of its Artificial Intelligence (AI) chip called the MI325X in the fourth quarter of the year, as it seeks to bolster its presence in a market dominated by Nvidia.

At an event in San Francisco, AMD CEO Lisa Su said the company plans to release its next-generation MI350 series chips in the second half of 2025. These chips include an increased amount of memory and will boast a new underlying architecture that AMD said will improve performance significantly over the prior MI300X and MI250X chips.

The announcements were broadly expected based on AMD disclosures earlier this year. They failed to cheer investors, who sent AMD shares down nearly five percent in afternoon trading. Some analysts attributed the fall to the absence of large new cloud-computing customers for the chips.

Shares of rival Nvidia were up 1.5 percent while Intel fell 1.6 percent.  

Demand for AI processors from major technology firms such as Microsoft and Meta Platforms has been far outpacing supply from Nvidia and AMD, allowing the semiconductor companies to sell as much as they can produce.

That has driven a massive rally in chip stocks over the past two years, with AMD’s shares up about 30 percent since a recent low in early August. 

“There are no new customers announced so far,” said Summit Insights research analyst Kinngai Chan, adding that the stock had gained ahead of the event in anticipation of “something new.”

Santa Clara, California-based AMD said vendors such as Super Micro Computer would begin to ship its MI325X AI chip to customers in the first quarter of 2025. The AMD design aims to compete with Nvidia’s Blackwell architecture.

The MI325X chip uses the same architecture as the already-available MI300X, which AMD launched last year. The new chip includes a new type of memory that AMD said will speed AI calculations.

AMD’s next-generation AI chips are likely to put further pressure on Intel, which has struggled to deploy a coherent AI chips strategy. Intel has forecast AI chip sales of more than $500 million (roughly Rs. 4,203 crore) in 2024.

New Server, PC Chips

AMD’s Su also said at the event that the company does not currently have plans to use contract chip manufacturers beyond Taiwan’s TSMC for advanced manufacturing processes, which are used to produce speedy AI chips.

“We would love to use more capacity outside of Taiwan. We are very aggressive in the use of TSMC’s Arizona facility,” Su said.

AMD also unveiled several networking chips that help speed moving data between chips and systems inside data centers.

The company announced the availability of a new version of its server central processing unit (CPU) design. The family of chips formerly codenamed Turin includes a version of one of them that is designed to keep the graphics processing units (GPUs) fed with data – which will speed AI processing.

The flagship chip boasts nearly 200 processing cores and is priced at $14,813 (roughly Rs. 12.45 lakh). The whole line of processors uses the Zen 5 architecture that offers speed gains of as much as 37 percent for advanced AI data crunching.

Beyond the data center chips, AMD announced three new PC chips aimed at laptops, based on the Zen 5 architecture. The new chips are tuned to run AI applications and will be capable of running Microsoft’s Copilot+ software.

In July, AMD raised its AI chip forecast to $4.5 billion (roughly Rs. 37,834 crore) for the year from its previous target of $4 billion (roughly Rs. 33,630 crore). Demand for its MI300X chips has surged because of the frenzy around building and deploying generative AI products.

This year analysts expect AMD to report data center revenue of $12.83 billion (roughly Rs. 10,78,711 crore), according to LSEG estimates. Wall Street expects Nvidia to report data center revenue of $110.36 billion (roughly Rs. 9,27,877 crore). Data center revenue is a proxy for AI chips needed to build and run AI applications.

Analysts’ rising earnings expectations have kept AMD and Nvidia’s valuations in check despite the share surge. Both the companies trade at more than 33 times their 12-month forward earnings estimates, compared with the benchmark S&P 500’s 22.3.

© Thomson Reuters 2024

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

MediaTek Dimensity 9400 SoC, the company’s latest flagship-tier smartphone processor, was launched on Wednesday. The company had previously revealed that the mobile platform would be introduced in October and shared some minor details, and now it has detailed the specifications and the capabilities of the processor. The tech giant claimed that the new system-on-chip (SoC) offers 35 percent faster performance on a single core than its predecessor. The MediaTek Dimensity 9400 SoC competes with the Snapdragon 8 Gen 3 chipset and the Apple A18 series chipsets.

In a press release, the chip maker introduced the new mobile platform. The MediaTek Dimensity 9400 chipset is a fourth-generation flagship processor built with Arm’s v9.2 CPU architecture as well as dedicated GPU and neural processing unit (NPU) architectures. Notably, it is built on TSMC’s second-generation 3nm fabrication process.

Continuing with the tradition of all big core design, it features one Cortex-X925 core with a maximum clock speed of 3.62GHz, three Cortex-X4 cores, and four Cortex-A720 cores. The company claims that the CPU architecture offers 35 percent faster single-core performance and 28 percent faster multi-core performance compared to the Dimensity 9300 SoC. It is also said to offer 40 percent more power efficiency compared to its predecessor.

The MediaTek Dimensity 9400 chipset also integrates the company’s eighth-generation NPU and offers on-device LoRA training, on-device video generation capability, and developer support for Agentic artificial intelligence (AI). The company claimed that the SoC could provide up to 80 percent faster large language model (LLM) prompt performance while maintaining 35 percent more power efficiency than the previous generation.

Coming to the GPU, the mobile platform is integrated with the 12-core Arm Immortalis-G925, which is said to offer 40 percent faster raytracing performance compared to its predecessor. Additionally, MediaTek claimed that it also provides 41 percent peak performance improvement and 44 percent power saving compared to the Dimensity 9300. The chipset also supports HyperEngine technology.

Apart from this, the MediaTek Dimensity 9400 features Imagiq 1090 for on-device image processing. It has some minor improvements as well such as HDR video recording throughout the entire zoom range, improvements in capturing moving objects, and lower power consumption when recording in 4K60 fps videos compared to its predecessor.