Qualcomm Inc. (NASDAQ: Arm Holdings Plc has threatened QCOM. (NASDAQ: But it was canceled with 60 days’ notice by ARM, leaving the San Diego-based semiconductor giant with just that much time to wind its business down and pay off outstanding debt.
What Happened: The architectural license agreement that Microsoft and Qualcomm have struck enables Qualcomm to build its chips using Arm’s standards. According to the document, the showdown may threaten the personal computers and smartphone market, Bloomberg reported.
Any Android smartphone or tablet you can buy these days uses a Qualcomm chip, sold in the hundreds of millions every year. According to the report, the cancellation would force the chipmaker to stop selling products that provide a large share of its around $39 billion in sales or face claims for heavy damage if it occurs.
The dispute surrounds Qualcomm’s 2021 acquisition of another Arm licensee and whether it is renegotiated concerning contract terms. Qualcomm claims that the chip design firm Nuvia, which Qualcomm recently acquired, is covered under its current agreement.
Qualcomm said the British business, which is backed by SoftBank Group, was trying to ‘strong arm’ a longtime partner. I don’t think you can say it’s to disrupt the legal process because its claim for termination is baseless. According to the report, the spokesperson said: “We are confident that Qualcomm’s rights under its agreement with Arm will be affirmed.”
Benzinga contacted Qualcomm and Arm, but they did not immediately respond.
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Why It Matters: The Snapdragon 8 Elite, Qualcomm’s latest top-of-the-range smartphone processor, includes a new Oryon CPU and boosted AI capabilities announced Monday.
Qualcomm’s Snapdragon Gen 4 shipments, which will exhibit 50 percent growth in late 2024, will result in high revenues and profits. As Apple Inc.’s 5G chip attempt unweaves, Qualcomm remains well-set thanks to AI gains and SoC price rises, notes the analyst.
As part of that partnership, Qualcomm and Honeywell International Inc. expanded their collaboration in early October to develop new AI-enabled solutions for the energy sector.
Price Action: Qualcomm’s shares finished Tuesday up 2.47% at $173.18. The stock also got a modest uptick after-hours trading, rising by 0.0058%. Meanwhile, Qualcomm shares have surged 23.50% year to date.
In contrast, Arm Holdings PLC ended the trading day up 0.15% to $152.58. After-hours trade, however, the price fell 0.12%. Data from Benzinga Pro places Arm up 121.39% so far this year.