Qualcomm projected it could save up to $1.4 billion annually in payments to Arm by acquiring startup Nuvia, according to internal documents revealed in a Delaware federal court trial. Qualcomm CEO Cristiano Amon testified on Wednesday, explaining that these savings justified the $1.4 billion acquisition of Nuvia in 2021.
Amon’s testimony is part of a legal dispute over whether Arm can demand Qualcomm destroy the technology acquired from Nuvia. Arm argues it never consented to the transfer of Nuvia’s license agreements, which Qualcomm used to develop custom computing cores and push into the PC market. This move aims to challenge Intel’s dominance and help Microsoft’s Windows ecosystem regain market share lost to Apple.
Qualcomm‘s reliance on Arm stretches back to the 2010s, when it shifted from designing custom computing cores to licensing designs directly from Arm. By the late 2010s, Amon noted, this dependency was stalling Qualcomm’s progress against competitors like Apple in smartphones and Intel in laptops. With no internal solution to reduce its reliance on Arm, Qualcomm turned its attention to Nuvia, a startup founded in 2019 by ex-Apple engineers.
Initially, Qualcomm attempted to collaborate with Nuvia to develop custom cores but eventually opted for a full acquisition. Although Nuvia was focused on server chips and lacked finished products, its designs and engineering talent aligned with Qualcomm’s ambitions.
To justify the deal, Amon highlighted potential savings on Arm licensing fees, particularly as Qualcomm anticipated expanding into the lucrative PC chip market. The projected $1.4 billion annual savings far exceeded the $50 million revenue reduction Arm executives feared at the time of the acquisition.
Analysts estimate Qualcomm pays Arm roughly $300 million annually, though this doesn’t account for potential expansions. Amon argued Qualcomm’s and Nuvia’s existing licenses allowed development of compatible cores, but Arm disagreed, terminating Nuvia’s license and demanding the destruction of related technology.
Closing arguments in the trial are scheduled for Thursday, as the court deliberates over the fate of Qualcomm’s Nuvia-powered ambitions and its relationship with Arm.
Featured image courtesy of TechCrunch
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