Behind the Silicon: Snapdragon X

[InkeyZero]

Llegó la hora del juicio.

Algunos analistas dicen que Arm tiene un buen caso, pero queda por ver cuál es el ángulo que Arm quiere imponer: renegociar con Qualcomm una nueva licencia ALA que le garantice mayores royalites por los núcleos desarrollados por Nuvia/Qualcomm, o la destrucción definitiva de la tecnología basada en el trabajo de Nuvia, lo que implicaría que su interés es que Qualcomm dependa de los núcleos creados por Arm.

Estiman que el juicio puede durar una semana. No lo sé. Vendo como compré.



https://www.ft.com/content/fa569924-bbd ... bab782a60a

[InkeyZero]

[InkeyZero]

My thoughts on Day-1 of #QcomArm trial:

- Both companies fired their first salvos through opening statements & executive testimonies & tried to set the narrative for the other party

- Arm is trying to convince the jury that Qualcomm acquired #Nuvia to save on license costs. It knows it needs a new license to use Nuvia technology, but it doesn’t want to negotiate with Arm. It tried to negotiate with Qualcomm, but since it couldn’t agree on new terms, it had no choice but to sue.

- On the other hand, Qualcomm is trying to project that it acquired Nuvia because Arm was falling behind on performance, and its current #ALA (architecture license) with Arm covers Nuvia technology. Additionally, Arm is asking for higher licensing fees to cater to the demand of its parent company, SoftBank

- IMHO, Arm’s opening statement was simple & told a complete story. It presented with a soft, almost victim-like demeanor. Qualcomm’s statement was more assertive and included many strong facts (e.g., Arm internal communications saying Qualcomm has “Bombproof” ALA).

- Testimonials were quite informative and revealed many interesting facts, some rumored and others unknown (e.g. Arm considered a fully vertically integrated approach)

- Arm’s first testimony was bungled during cross-examination, the second was neutral, and the last one was powerful.

The day started balanced, swung toward Qualcomm, and ended with a neutral/slight advantage to Qualcomm.

Check out a more detailed analysis of the day on our #TantrasNotes (link in the comments)

https://bit.ly/3P0FVc0

Come back tomorrow for the second day’s update.

[InkeyZero]

[InkeyZero]

Here are my thoughts on the second day of #QcomArm trial:

- The second day had very interesting morning and boring afternoon sessions. The most important discussion was whether Nuvia's technology (design and RTL code) is derivative of
@Arm
's technology.

- During Nuvia founder, CEO, and now
@Qualcomm
SVP Gerard Williams III’s testimony, Arm's lawyer tried to corner him into agreeing to that. She even pointed to the Nuvia ALA text, which seems to suggest that Nuvia’s technology is a derivative of Arm’s technology (Arm ARM - Architecture Reference Manual). But Gerard vehemently opposed and fought against it throughout his lengthy testimony.

- This assertion of derivative seems an overreach and should put a chill down the spine of every Arm customer. No matter how much they innovate in processor design and architecture, it can all be deemed Arm’s derivative and, hence, its technology.

- It will be interesting to see how the Jury will weigh this against scores of testimony and evidence from yesterday

- Today, Arm finished its testimonies, and Qualcomm started with its witnesses.

- Tomorrow, I expect to see Qualcomm vehemently fighting against Arm’s assertion and most likely see Qualcomm CEO Christian Amon take the witness stand.

Check out my hashtag#TantraNotes hashtag#blog for more details:

https://bit.ly/3BoyAzP

Come back tomorrow for the third day’s update.
#Licensing
@TantraAnalyst

Although Qualcomm's Oryon general-purpose cores, found inside Snapdragon X processors are based on Arm's Armv8 instruction set architecture (ISA), they use very little technology developed by Arm. This is according to Gerard Williams III, one of the lead developers behind Oryon and a variety of Apple's processors, reports Reuters.

"One percent or less," said Williams when asked to estimate the amount of Arm technology in the final design developed by Nuvia.

Qualcomm's Oryon originates from Nuvia, a company that Gerard Williams III co-founded with his partners in 2019. Nuvia's original focus was to design high-performance, energy-efficient CPU cores (codenamed Phoenix) for datacenters.
The partners acquired two non-transferrable licenses from Arm: the Technology License Agreement (TLA) and Architecture License Agreement (ALA), the former to rework its existing cores and the latter to design custom cores. Since the goal was always to go with custom cores, the team developed its cores from scratch without using Arm's physical IP, or at least using very little of it.

Indeed, licensees of Arm's ISA can design proprietary microarchitecture designed from scratch, so long as it correctly implements Arm’s instructions. Because Nuvia's engineers designed their own pipelines, execution units, cache systems, and other CPU internals, the final core did not incorporate Arm's proprietary circuit blocks or off-the-shelf designs. As a result, while Nuvia's cores are Armv8 cores, they probably share very little of the actual 'Arm-designed' technology beyond the instruction set and baseline specifications.

[InkeyZero]

@Qualcomm CEO @cristianoamon takes witness stand - Explains journey of $qcom $arm relationship
- From #ALA for smartphones, to #TLA to #ALA
- Complained many times to Arm about it's lag against @Apple
- Bought Nuvia because of Gerard and his reputation at @Apple
building Apple M series chips
- Feels terrible to in this position with @Arm
- Still would buy from Arm, I performance improves and prices come down...

#qcoarm $qcom $arm

@cristianoamon's testimony continues
- Connected with Simon to resolve the Nuvia issue
- @Arm wanted Nuvia ALA rates
- TLA deliveries were halted, he had to interfere...
- Talks about #SnapdragonXElite Launches
- Got a call from TM Roh. He seemed assurances of supply of SnapdragonXElite because of Arm issues
- Masa had told Roh that Qualcomm Arm l license will expire 2025 and will not give new license to @Qualcomm ( which is not true)

#Qcomarm
@Snapdragon
#licensing

The most interesting part of the 3rd day, and perhaps the entire #qcomarm trial came during the end of @Qualcomm CEO @cristianoamon's testimony, when Qualcomm counsel questioned him :
- "Arm Technology" term has been used many many times during last three day. It does have a specific definition in the contract. That doesn't include any of the work, including design, RTL, and lots of other stuff done by companies like Nuvia to make chips. This is in contrast to how it is mentioned in the definition of "Confidential Information" in the contract. There it seems to suggest Architecture Compliant Core also is part of @Arm Technology. The latter definition was hammered by Arm counsel in the last two days. It would be interesting to see how will Jury think about it
- Turning Piano analogy on it head. Arm compared it's ISA to Piano Keyboard. It claimed, No matter how big or small the Piano is, it is covered by its license. Qualcomm counsel extended that analogy to show how ridiculous it would be to say that because you designed the keyboard, you own all the pianos in the world. Suggesting that is something Arm is trying to do.

$qcom $arm #licensing
@TantraAnalyst

@Qualcomm expert witness, a @USC professor is explaining what is #microarchitecture and how $qcom has to build all of this, and how @Arm is no where is not involved in all of that in simple terms so that Jury understands.

All of this to prove that micro architecture is not a derivative....

#qcomarm

Cross examination of @Qualcomm's expert witness was pretty intense. Lots of back and forth on defining what is @Arm technology. Al though there is definition of the term in the #ALA, the discussion was focused on the explanation of "Confidential Information" under which, it seems "Architecture Compliant Core" is included in the Arm derivatives. The witness Dr.Murali couldn't agree to that contract term, based on his technical background.

This is. The same thing that was the bone of contention during Gerard Williams testimony

Here is a link to the details of day 2: https://bit.ly/3BoyAzP

#QcomArm $qcom $arm #licensing
@TantraAnalyst

We are at the first break. So far

- @Qualcomm expert witness, explained what micro architecture is
- How it is designing & implementing different component & functions
- Not dependent on @Arm instructions hence not using or derivative of it
- Rejected testimonies of @Arm expert witness's assertion
- @Arm lawyer is cross - questioning him & make him agree against it . So far he is for he is going strong

#qcomarm #licensing

[InkeyZero]

Qualcomm CEO cites $1.4B annual savings from Nuvia acquisition amid Arm dispute

Tickers of interest: $QCOM

Full Story → https://m.piqsuite.com/reuters/qualcomm ... 8-23-22-39

Qualcomm CEO Cristiano Amon testified that acquiring Nuvia in 2021 was expected to save the company $1.4 billion annually in Arm royalty fees, justifying the $1.4 billion purchase.

The trial centers on Arm's claim that Qualcomm must destroy Nuvia’s technology, arguing it lacked consent to transfer Nuvia's license. Qualcomm views Nuvia as crucial to its PC market push.

The legal battle highlights Qualcomm's strategic shift away from Arm designs to compete with Apple and Intel in evolving chip markets.

[InkeyZero]

Here are my thoughts on the 3rd day of #qcomarm trial:

- Significant progress was made on the third day.

- The case has boiled down to two questions to be decided by the jury:

1) Whether @Qualcomm and/or Nuvia breached a specific section of the Nuvia #ALA (15.1a), which requires @Arm to prove that Qualcomm was required to destroy all products using the Nuvia technology that Qualcomm acquired;

2) Whether Qualcomm’s products are licensed under the Qualcomm ALA. The first was the decision by Arm lawyers, and the second is the confirmation asked by Qualcomm.

- The day saw intense cross-examination of Qualcomm expert witness Dr. Murali Annvaram and the testimony of Qualcomm CEO Cristiano Amon.

- Arm’s lawyer tried to make Dr. Annavaram say that cores are Arm technology, which he didn’t.

- Cristiano explained that Arm's performance lag behind Apple was the main reason for buying Nuvia, and he would be happy to get TLA from Arm if it provided high-performance cores even now.

- All the testimonies are now completed. Tomorrow, both parties will make their closing statements, and jury deliberations will begin. If the Jury decides quickly, we might have a decision by tomorrow evening.

Check out my #TantraNotes #blog for more details:
https://bit.ly/4gl08oB

Come back here tomorrow for the fourth day’s update.

#Licensing $qcom $arm
@TantraAnalyst

[InkeyZero]

https://www.tantraanalyst.com/ta/qualco ... questions/

Qualcomm vs. Arm trial, Day 3 – Testimonies end, dispute funneled down to two key questions

Summary of Day 3
Check out the summary of Day 1 here and Day 2 here.
Significant progress was made on the third day. At the end of the day, the case has boiled down to two questions to be decided by the jury: 1) Whether Qualcomm and/or Nuvia breached a specific section of the Nuvia ALA (15.1a), which requires Arm to prove that Qualcomm was required to destroy all products using the Nuvia technology that Qualcomm acquired; 2) Whether Qualcomm’s products are licensed under the Qualcomm ALA. The first was the decision by Arm lawyers, and the second is the confirmation asked by Qualcomm.

The day saw intense cross-examination of Qualcomm expert witness Dr. Murali Annvaram and the testimony of Qualcomm CEO Cristiano Amon. Arm’s lawyer tried to make Dr. Annavaram say that cores are Arm technology, which he didn’t. Cristiano explained that Arm’s lagging behind Apple in performance was the main reason for buying Nuvia, and he would be happy to get TLA from Arm if it provided high-performance cores even now.

All the testimonies are now completed. Tomorrow, both parties will make their closing statements, and jury deliberations will begin. If the Jury decides quickly, we might have a decision by tomorrow evening.
Come back here tomorrow for the fourth day’s update.

Highlights of Day 3:

• Cross-examination of Annavarm was pretty intense. There is a lot of back and forth on defining what Arm Technology is. Although there is a definition of the term in the ALA, the discussion focused on the explanation of “Confidential Information,” which seems to suggest that “Architecture Compliant Core” is an Arm derivative. Dr. Annavarm didn’t agree to that at all. This is the same thing that was the bone of contention during Gerard Williams’s testimony on Day 2
• The “Arm Technology” term has been used many, many times during the last three days. It does have a specific definition in the contract. That doesn’t include any of the work, including design, RTL, and lots of other stuff done by companies like Nuvia to design processors. This is in contrast to how it is mentioned in the definition of “Confidential Information” mentioned above. It will be interesting to see how the jury will view this.
• Qualcomm’s counsel turned Arm’s Piano analogy on its head. Arm compared its ISA to a Piano Keyboard design during the opening statement and used it throughout the trial. It claimed that no matter how big or small the Piano is, the keyboard design remains the same and is covered by its license. Qualcomm’s counsel extended that analogy to show how ridiculous it would be to say that because you designed the keyboard, you own all the pianos in the world. Suggesting that is what Arm is trying to do.

Video depositions from Arm engineers and managers

• Internal messages suggesting Arm has no basis to sue Qualcomm after the Nuvia acquisition but only after the company ships actual products
• Another opinion is that Arm ARM doesn’t help in designing processors or developing any features
• For the compute platform (Hamoa), Qualcomm started the project with Nuvia implementer ID and changed it to that of Qualcomm
• Emails suggesting Qualcomm was complaining Arm substantially increased its royalty rates after the company disbanded it’s custom core effort
• Messages suggesting Qualcomm complained that Apple’s cores have 20-25% better performance than Arm cores

Dr. Murali Annavaram – Qualcomm expert witness

• Professor at USC, previously worked for Intel and Nokia, lots of awards/recognitions
• Reviewed source code of Qualcomm and Nuvia RTL
• Explained what microarchitecture is and how designing cores involves switching 15 billion transistors on and off etc, in simple terms to the jury
• 1000s of microarchitecture blocks in a chip – computing, storage, memory, scheduler etc.
• Opined strongly that Nuvia/ Qualcomm CPU cores do not use or are derived from Arm technology
• Claimed that the commonality between Arm RTL and Qualcomm RTL is less than 1%
• RTL codes are regularly regenerated, so most of the codes in cores will be Qualcomm’s
• The commonality between Nuvia/Arm RTL codes highlighted by Arm was mostly in comments, not in code
• Long winding back and forth between Arm counsel and Dr. Annavaram on whether Arm complaint cores are derivative of Arm technology. The confusion stems from how they are defined differently in two parts of the contract.
• Annavaram said, he is not a lawyer, and he can’t opine on how it is defined in the contract. But based on his technical knowledge, cores are not a derivative

Cristiano Amon

• Explained Qualcomm and Arm relationship in the last few years – started with ALA for building the first smartphone SOC, when Arm didn’t have its core
• Arm came to Qualcomm with TLA deal and made the company stop its custom core effort
• Arm fell behind Apple in performance and even behind Intel and AMD in PCs
• Had a few executive-level meetings with Arm to complain about it
• Bought Nuvia because of Gerard Williams, and his reputation at Apple building Apple M series chips
• Worked with Arm’s then-CEO Simon Segars to resolve the Nuvia licensing issue but in vain
• Got a call from TM Roh, head of Samsung Mobile, asking for assurance of supply of Snapdragon chips.
• He was worried because the chairman of Arm board and SoftBank CEO Masayoshi Son had told him that Qualcomm’s Arm license will expire in 2025 and may not be extended (actually, the contract runs till 2028 with an option to extend for five more years)
• Agreed to Arm’s “Piano” analogy but gives qualifications (e.g., accordion also has same keys)
• Went to Nuvia first to create custom CPU but didn’t workout
• Strongly said to many questions that Qualcomm is committed to honoring all contracts, not just license ones
• Qualcomm CFO’s initial Nuvia price estimate was $500B
• Reiterated that he didn’t believe Qualcomm needed permission from Arm to buy Nuvia but asked for approval anyway to maintain good relationship
• Said it is very unreasonable for Arm to ask for the destruction of Nuvia’s work, which was not dependent on Arm’s license
• Was asked about his compensation, for which he replied that he didn’t remember and said it’s public information

[InkeyZero]

Now time for cross examination of
@cristianoamon

- Agrees to "Piano" analogy but gives qualifications
- First
@Qualcomm
went to Nuvia for making a custom CPU
- Strongly said to many questions that are committed to honoring all contracts, not just license contract
- Strongly said it his belief that Arm license is needed to develop Arm compliant cores,
- CFO's Nuvia price estimate was $500B
- Lawyer reiterates Qualcomm estimates $1.4B licensing savings.
- Qualcomm didn't believe they needed
@Arm
permission before buying Nuvia. Needed only if #ALA had to be assigned
- Arm sent a letter which mentions they did a sloppy communication on licensing requirements related to Nuvia acquisition
- Cristiano says it is very unreasonable for Arm to ask for destruction of Nuvia work, which was not dependent on Arm license.
- Qualcomm"s counsel made two impactful points toward the end :1) Clarify that "Arm Technology" is a defined term in the contract ( i.e. not to be taken from some other place in the contract, e.g. confidential information, used in the other testimonies); 2) Turn the the Piano argument on its head by saying: Who designed the Piono keyboard to claim ownership of all the pianos in the world. Expect more details on this later)

That was the end of testimonies.Tomoorow will be closing statements and Jury deliberations start ...
#Qcomarm $qcom $arm #licensing

The most interesting part of the 3rd day, and perhaps the entire #qcomarm trial came during the end of
@Qualcomm
CEO
@cristianoamon
s testimony, when Qualcomm counsel questioned him :

- "Arm Technology" term has been used many many times during last three day. It does have a specific definition in the contract. That doesn't include any of the work, including design, RTL, and lots of other stuff done by companies like Nuvia to make chips. This is in contrast to how it is mentioned in the definition of "Confidential Information" in the contract. There it seems to suggest Architecture Compliant Core also is part of
@Arm
Technology. The latter definition was hammered by Arm counsel in the last two days. It would be interesting to see how will Jury think about it

- Turning Piano analogy on it head. Arm compared it's ISA to Piano Keyboard. It claimed, No matter how big or small the Piano is, it is covered by its license. Qualcomm counsel extended that analogy to show how ridiculous it would be to say that because you designed the keyboard, you own all the pianos in the world. Suggesting that is something Arm is trying to do.

$qcom $arm #licensing
@TantraAnalyst

[InkeyZero]

.@Arm just completed it's closing statement. As mentioned in my summary yesterday, there are 3 (really 2 questions for the jury to answer:
1. Did Nuvia breach the contract (Nuvia #ALA)?
2. Did @Qualcomm breach Nuvia ALA
3. Are $qcom products with Nuvia code covered under Qualcomm ALA?

Arm reiterated their same arguments and addressed some of the issues Qualcomm had raised
- Nuvia/Qualcomm needed Arm consent for acquisition
- Breached confidentialality requirements of ALA by sharing it with QC
- Bought Nuvia because of cost savings not performance
- Arm Technology includes Architecture Compliant Core (Remember my comments about it)
- Many things Qualcomm mentioned are irrelevant (e.g. SoftBank ownership, CEO salaries etc .)

My #TantraNotea #blog

https://bit.ly/TA-Notes

#qcomarm #licensing

[InkeyZero]

.@Qualcomm' closing statements conclude. It also reiterated what it said during the course of trial.But added few new things:

- Arm never claimed any harm or damages
- Sent letters over 40 OEMs saying Qualcomm has breached the Arm agreement
- Developing core and RTL is not a derivative of Arm tech
- There was no assignment of #ALA to Qualcomm
- Qualcomm ALA covers all its products (allows work done by itself & others)
- Arm ARM is a pulically available document
- The major reason for Arm to bring this case is to increase revenue from Qualcomm, at the behest of Chair of the board

Qualcomm's approach was a little bit emotional ( harm to the industry etc.), whereas Arm's approach more like this is a contract case, here are our points

#qcomarm $qcom $arm #licensing
@TantraAnalyst


The case in now with the Jury. It will have to an unanimous verdict.

Time starts ticking now...

[InkeyZero]

Tiene un punto, pero a la vez hay una diferencia: Tenemos el hecho que los núcleos de Apple y Nuvia/Qualcomm son más rápidos que los de Arm, y que los ingenieros de Qualcomm/Nuvia afirman que no emplearon como base los núcleos y diseños de Arm para su desarrollo, pero que, lógicamente, si iban a ser conforme a su arquitectura, para poder ser luego certificados por Arm.

En otras palabras, los núcleos desarrollados por Nuvia/Qualcomm hacen lo mismo que los de Arm, pero no de la misma manera, y de hecho, el diseño e implementación de Arm no ofrece el mismo rendimiento.

Ignoro qué decisión tomarán, pero me pregunto si los diseños y dearrollos de Apple también están bajo un contrato con cláusulas similares y si Arm considera que dichos productos son su propiedad intelectual y no de Apple.

En lo legal, parece que Arm tiene un punto por la forma en que el contrato está escrito, por el lado pŕactico y ético, me pregunto si el jurado considerará que el alcance del contrato es leonino a favor de Arm, si se toma a rajatabla. A mí me parece que refleja una práctica monopólica y desleal, pero la ley es la ley, y yo de eso no sé ná.

Todos ellos firmaron contratos, y ahora están peleando porque cada cuál consideran que el contrato contiene secciones que tiran para su lado, y en efecto, al parecer hay contradicciones y ambiguedades que pueden ser tomadas de uno u otro modo, según el color del cristal con el que se mire.

En todo caso, le toca al jurado decidir en qué va a parar este despelote. Todos tienen rabo de paja en este embrollo, pero hay que resolver esto.

Honestamente, prefiero que gane Qualcomm, porque Arm se quedó en el aparato y perder los desarrollos de los núcleos Oryon sería bien negativo.

Lo ideal para mí es que vayan a un arbitraje para acordar tasa de royalties adecuadas para un ALA, porque los TLA de Arm no valen la pena si implican estar siempre uno o varios pasos por detrás de la competencia.

[InkeyZero]

While the jury is deliberating on #qcomarm case, and we wait, here is an interesting, and somewhat related topic - What the #ALA rate @Apple pays @Arm ?

This @theinformation report suggests it is less than 30 cents per device, no matter how many cores the device has...

In the emails revealed during the case, Arm execs were looking to unwind two #ALA s. One was @Qualcomm & other was "Fender" which I assumed was $aapl. That seems to be correct...

https://bit.ly/3Pbrlhz

#licensing $qcom $arm @waynema @coryweinberg @TantraAnalyst

[InkeyZero]

[InkeyZero]

[InkeyZero]

[InkeyZero]

Here are my thoughts on Day 4 of #qcomarm trial:

- Today was the last day of the hearing. Both parties gave their closing statements, which were primarily rehashes of their arguments so far.

- The presiding judge gave final jury instructions, and the jury started deliberations around noon. They will have to decide on three questions, and their verdict on each of the questions will have to be unanimous:

1) Whether Nuvia has breached section 15.1(a) of Nuvia ALA?
2) Whether @Qualcomm has breached section 15.1(a) of Nuvia ALA?
3) Are Qualcomm products using Nuvia technology covered under Qualcomm ALA?

- Section 15.1(a) refers to destroying Arm's confidential information after ALA cancellation.

- The second question is interesting, as Qualcomm was never a party to the Nuvia ALA. However, Arm claims that since Qualcomm enjoyed the benefits of the technology developed under the Nuvia ALA, it has to be associated with that contract.

- The third question is Qualcomm’s counterclaim, which is to protect it from any future litigation related to Nuvia technology.

- Jury deliberated until the end of the day (4:30 p.m.) but didn’t converge. They will return tomorrow at 9 am. The judge might also discuss remedies tomorrow.

- I am hopeful that the Jury will come up with a verdict tomorrow, or else they will have to come back on Jan 3rd next year because of the Christmas holidays. That will be a nightmare scenario as they might have forgotten all the testimonies and other details.

More deails on my #TantaNotes #Blog:

https://bit.ly/49JpgmF

Keep checking this handle for updates...

@Arm $qcom $arm #Licensing

[InkeyZero]

The Tech Industry Death Match That Wasn't

Mike FeibusMike Feibus
Mike Feibus
President and Principal Analyst, FeibusTech. Also Columnist at USA Today Tech, MarketWatch, CIO Magazine
20 dic 2024

WILMINGTON, DE – After a third full day of testimony here Wednesday in this infuriatingly persistent Arm v Qualcomm legal battle, US District Judge Maryellen Noreika freed the jury, sending the eight members out to face the crisp, sunny day turned damp.

And after the courtroom door closed behind the five women and three men, lawyers for both sides crowded the podium to begin structuring the next morning’s jury instructions.

Immediately, I sensed that Judge Noreika was thinking what I was thinking: “I don’t know what this is!” she told Arm’s attorneys. “What contract provision is in dispute?”

Yes, exactly.

The jury will resume deliberations this morning, having failed to reach a verdict after three-and-a-half hours Thursday afternoon.

I felt their pain. Under our belts were three-and-a-half days of sound and fury – tabloid-quality he-said, she-said testimony that alternately framed one side as wrongdoer and wronged. And I’m not feeling any more informed or enlightened about the relative strength of the cases of Arm or Qualcomm, two successful, longtime industry partners that drifted apart. Or of the path forward for their symbi-soured relationship. Or for the technology business overall.

Indeed, this case has felt about as relevant-adjacent to the electronics industry as a Mike Tyson-v-influencer bout is to boxing. But make no mistake, there are critical new business insights – all with serious implications – for any company, large or small, that is:

• Building just about any electronics product, from car fob to car and from security camera to big-screen TV.
• Supplying processors to run those products.
• Writing software to ensure the processor and products run as advertised, and
• Investing, backing or planning to back companies in any of these three areas.

Because at the core of this court battle is concerning new behavior out of Arm, a publicly-held, increasingly for-profit gatekeeper for a de facto industry standard that guides how billions of chips interact with software, systems and each other.
Consider yourself warned

Over the past decade, Arm and Qualcomm have evolved into the worst best partners. Qualcomm was Arm’s biggest customer for a time, and they both made each other a lot of money. But they each wanted more.

For its part, Qualcomm wanted industry-leading processor performance, and to pay less on a per-unit basis for it. And increasingly profit-minded Arm wanted to build a bigger chunk of systems – and get paid commensurate with that. Regardless of how well their products performed.

Each companies’ desires grew more urgent in the 2010s. Apple, Qualcomm’s biggest smartphone processor rival, started making its own chips under an Architecture License Agreement, or ALA, with Arm. Qualcomm was paying more for pre-designed processor cores under an Arm Technology License Agreement, or TLA.

Arm’s profit priorities intensified after Softbank bought the company in July 2016. And the tension between the competing goals of Arm and Qualcomm came to a head.

Softbank thought it had an answer to its Arm profit problems in September 2020, when it announced that Nvidia was buying the company for a heart-stopping $40 billion. Qualcomm and others opposed the deal. And regulators listened, convincing Nvidia to drop its bid in February 2022. Later that year, Softbank pivoted toward taking Arm public.

For its part, Qualcomm completed its acquisition of Nuvia early in March 2021. By that time, Nvidia’s proposed buyout of Arm was already in regulatory crosshairs. And Qualcomm was working toward realizing its dream of supplying processors that beat Apple’s best – and paying Arm much less on a unit basis.

IP UH-OH

When Arm sued Qualcomm for breach of contract in August 2022, few observers – me included – ever thought it would go to trial. For one reason, Arm’s case was weak. Nuvia had an ALA in place if it ever needed one to build and sell Arm-compatible processors. But it didn’t need one, as it happened.

Qualcomm also has an ALA – a much better, more comprehensive license – with favorable pricing. So after the acquisition, the Nuvia team began tailoring its core for the laptop PC market. And in June 2024, the chips began selling under Qualcomm’s ALA.

That’s a pretty defensible design-and-go-to-market plan. That said, it would have been even more defensible had Nuvia founder Gerard Williams not insisted on adding terminology like design “derivatives,” “included technology” and “compliant cores” to its Arm ALA. Williams thought the language would add an extra layer of IP protection. As it turned out, though, creative Arm folks twisted their meaning in effort to protect their interests over Nuvia’s.

What damages?

Although Arm alleged breach of the Nuvia ALA, the IP licensing house never claimed any damages. A curious omission, given that assessing harm is a foundational tenet of contract law. That could be because Arm doesn’t want pocket money if it means allowing Qualcomm to continue shipping its own Nuvia-based processors, which earn Arm pennies apiece in royalties – and outperform Arm’s own off-the-shelf cores.

In any event, the jury isn’t considering damages. They’re not considering much at all.

Regardless, the potential ramifications of the jury’s decision are gargantuan – for both Arm and Qualcomm as well as for the entire electronics industry. That said, the most likely outcome will be that the two companies continue operating more or less as before, with some minor adjustments.

In the meantime, though, this case should put the industry on notice. The testimony in this lawsuit has laid bare Arm’s intent to leverage its gateway status to maximize profits – even if it means putting a big partner at risk.

In the short term at least, partners – partnenemies? – need access to the Arm instruction set in order to link their products to a globe full of smartphones, webcams, thermostats, kitchen appliances, automobiles and laptops – along with the applications that make those systems useful.

But they’d better start working together on a long-run alternative. Because Arm’s profit squeeze is only just getting started.

Interesante giro en la conversación: La licencia de Arm no es necesaria para diseñar, sino para contruir y vender productos finales.

No creo que sea el caso, porque Arm ofrece soporte durante la fase de diseño.

Todavía están deliberando.

[InkeyZero]