Home » Technology » ARM notifies Qualcomm of termination of IP contract… After that, there were ‘design geniuses’ from Apple.

ARM notifies Qualcomm of termination of IP contract… After that, there were ‘design geniuses’ from Apple.

ARM, a semiconductor design company, unilaterally notified Qualcomm, a leading U.S. semiconductor company, of the termination of its semiconductor design asset (IP) use contract. On the 22nd, ARM notified Qualcomm of its intention to terminate the license agreement.

It is unprecedented for ARM, known as the ‘Switzerland of the semiconductor industry’ for providing the basic design blueprint for all smartphone brain chips in the world, to ask a specific customer not to use its IP. All companies, including Qualcomm, Samsung Electronics, Apple, and MediaTek, are using ARM’s IP to create smartphone brain chips.

ARM’s contract termination notice came as a surprise while Qualcomm was in a festive mood by holding an event to unveil ‘Snapdragon 8 Elite‘, its most ambitious chip of all time.

ARM is a company that provides IP, which is the rough outline of semiconductor design, to customers and makes profit by charging usage fees. Since it is close to impossible for each company to design the complex smartphone brain chip responsible for various apps and graphics processing from scratch, ARM provides the design sketch for them.

There are two main ways to provide ARM’s sketches. These are the Technology License Agreement (TLA) and the Architecture License Agreement (ALA). TLA uses ARM’s design chunks that have been assembled to some extent. On the other hand, ALA is a contract in which the customer only takes the individual design license and assembles it to suit the customer’s taste.

While Qualcomm, Samsung Electronics, and MediaTek use ARM’s IP using the TLA method, Apple is designing brain chips for iPhones and other devices using the ALA method. The design difficulty of the ALA method, which requires assembling design assets from scratch, is bound to be higher.

Apple’s success was possible thanks to the so-called ‘design geniuses’ who initially led the design of Apple Silicon, its own chip. They became independent and founded a semiconductor design company called Nubia. Nubia signed an ALA contract with ARM and began designing new server semiconductors, but in 2021, Qualcomm suddenly acquired Nubia for 1.5 trillion won.

Afterwards, Qualcomm designed its own chips using Nubia’s design technology. Accordingly, ARM filed a lawsuit against Qualcomm in 2022. If this incident is overlooked, I believe that Qualcomm and other customers will be able to virtually neutralize the royalty contract system through a detour in the future. Even though Qualcomm is ARM’s largest customer, it has a strong background.

The prevailing view is that the two sides will eventually reach an agreement, but in the worst case, there is a possibility that Qualcomm will not be able to use ARM IP-based chips for the time being. Samsung Electronics, which plans to use Qualcomm chips in the Galaxy S25 to be released next year, may also be affected.

Heekwon Lee (lee.heekwon@joongang.co.kr)

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.