Qualcomm and Arm head back to trial as huge damages loom

• Qualcomm alleges Arm leaked its 2024 termination threat to media, damaging chip deal discussions between Qualcomm and Meta Platforms
• The five-day jury trial represents the latest dispute between the firms after Arm sued Qualcomm in 2022, though Qualcomm secured a partial victory in 2024
• Arm, owned by SoftBank Group, has countered that Qualcomm also leaked non-public antitrust probe details and denies breaching the contract, which runs through 2033

Qualcomm and Arm Return to Court Over Contract Dispute and Potential Billion-Dollar Damages

Chipmaker Qualcomm and chip technology firm Arm Holdings are heading back to trial on Monday in Delaware federal court, with billions of dollars in damages at stake. Qualcomm alleges that Arm breached contract terms by withholding chip testing tools and damaging a potential chip deal with Meta Platforms by leaking its 2024 threat to terminate their agreement to the media.

Key Legal Claims:

Qualcomm, one of Arm's largest customers, is seeking to stop paying royalties to Arm for up to five years—potentially worth billions of dollars. However, Judge Maryellen Noreika is considering whether to dismiss that contract term, which could significantly reduce Qualcomm's recoverable damages.

Arm, owned by Japan's SoftBank Group, has denied the breach allegations and countered that Qualcomm's chip deals were speculative. Arm also claims Qualcomm cannot seek damages for the leak because Qualcomm itself leaked non-public details of antitrust probes into Arm.

Background and Implications:

This five-day jury trial represents another chapter in the contentious relationship between the firms. Arm previously sued Qualcomm in 2022 over contract breaches, though Qualcomm prevailed in 2024. A related bench trial will examine whether Arm negotiated in good faith for the next version of its chip technology, with Qualcomm's agreement running through 2033.

The dispute is significant as both companies operate in critical semiconductor markets. Qualcomm manufactures chips for Android phones and is expanding into other sectors, while Arm supplies fundamental chip design technology to Qualcomm, Nvidia, and other firms, increasingly positioning itself as a competitor.