Arm sues Qualcomm, aiming to unwind Qualcomm's $1.4B Nuvia purchase
reuters.com
reuters.com
My nutshell:
1. ARM gave a broad range of licenses to Nuvia to develop an ARM-based architecture for use in servers, with a license-fee to match this objective (probably a favorable one, because it's a field ARM aims to expand):
"Nuvia’s licensing fees and royalty rates reflected the anticipated scope and nature of Nuvia’s use of the Arm architecture. The licenses safeguarded Arm’s rights and expectations by prohibiting assignment without Arm’s consent, regardless of whether a contemplated assignee had its own Arm licenses."
2. Qualcomm acquires Nuvia with the intention to use the developed IP for (quote):
"powering flagship smartphones, next-generation laptops, and digital cockpits, as well as Advanced Driver Assistance Systems, extended reality and infrastructure networking solutions"
Sounds quite reasonable if the claim is validated: ARM gave favorable conditions to a startup which aimed to compete in a field where ARM is weak (servers). Now the biggest customer of the strongest revenue-market of ARM (mobile devices) has acquired that startup to repurpose their development and license to use in mobile devices, PCs, automotive, VR,...
"The licenses safeguarded Arm’s rights and expectations by prohibiting assignment without Arm’s consent, regardless of whether a contemplated assignee had its own Arm licenses."
ARM claims that they gave Nuvia a license with the condition to develop server-architecture, Qualcomm assumes that (the total sum of) their licenses allows them to use the architecture for whatever they want. ARM disagrees.
- Feb 22, arm announced to Qualcomm that Nuvia's ALA/TLA licenses would be terminated in March 1st 22 (for the reasons from parent post)
- On April 1st, arm counsel acknowledged the termination of the licenses and that Nuvia was in compliance (aka destroyed the designs under the license they had obtained, which is in the ALA contract)
- On multiple occasions afterwards Qualcomm asked arm to validate "new core designs" to be used on upcoming products (!)
- Qualcomm PR/CEO kept talking about upcoming product based on Nuvia's work, while the license was effectively revoked, and was planning to sample such chips
It will be interesting to see Qualcomm's counterclaims, but arm's factual presentation seems pretty clear and doesn't paint Qualcomm under a very flattering light. Arm's complaint all in all looks pretty reasonable (again, we only have one side of the story, but there's some pretty obvious bad faith from Qualcomm here).
- On Feb22 ARM announced the termination of Nuvia's license.
- "On February 23, 2022, Qualcomm confirmed that it was still developing the relevant Nuvia technology by stating in a court filing that certain Nuvia documents were based on “years of research and work” and would “reveal secret design components of Qualcomm chips that are still in development."
- "On March 1, 2022, the Nuvia licenses terminated, along with the corresponding rights to use or sell products based on or incorporating Nuvia technology developed under those licenses."*
- "Qualcomm further told Arm that it planned to “redeploy NUVIA employees” and “transfer NUVIA’s work” to Qualcomm and, consistent with that plan, Qualcomm has on-boarded Nuvia’s leadership and employees as Qualcomm employees".
- "Arm wrote Qualcomm clarifying that neither Nuvia nor Qualcomm was authorized to continue working on technology that was developed under the Nuvia licenses."
- "Two weeks later, Qualcomm sought Arm’s verification that a new Qualcomm processor core complied with Arm architecture so that it could be verified and incorporated into a product."
- "In June 2022, Qualcomm’s CEO reiterated that it would soon begin “sampling” Nuvia chips to companies, allowing them to design electronic devices incorporating the chips in the “next year.”19 Based on that timeline, he explained, “[i]n late next year, beginning 2024, you’re going to see Windows PCs powered by Snapdragon with a Nuvia-designed CPU.”"
> Because Qualcomm attempted to transfer Nuvia licenses without Arm’s consent, which is a standard restriction under Arm’s license agreements, Nuvia’s licenses terminated in March 2022. Before and after that date, Arm made multiple good faith efforts to seek a resolution.
If I understand this correctly, arm's licences have an approval process in case of acquisitions for license transfer (which is pretty common), and Qualcomm thought that because they had their own (probably a lot broader) set of arm licenses, they didn't need to seek their approval (or more likely, didn't want to pay some extra transfer cost ?) ?
I can see Qualcomm's argument from a layman's point of view, arm claims that something designed by licensee A can't be transferred to licensee B without their approval, which seems a bit broad of a reach but contracts are weird I guess ? There's no doubt Nuvia's contracts was less favorable to whatever set of licenses Qualcomm operates with arm (relative company sizes and all).
Reuters article goes on about Qualcomm eventually ditching arm's Cortex designs and replacing them by Nuvia's being what this is about. That seems a bit of a stretch, and would be a large pivot in how arm used to operate with its licensees that would send a chilling effect if true.
So I'd be quite surprised if that was the case, considering arm is not under new management. I'm not saying there can't be tensions or bruised execs egos on both sides about this, but this seems a bit of a radical step to suspend Nuvia's license and ask that all their design IP be destroyed.
If Nuvia signs an agreement "we get access to ARM tech and we won't transfer/assign our tech to someone else without ARM's agreement (even if that someone else already has ARM licenses" then the tech can't be transferred.
A big part of the complaint seems to come down to this: 1) Nuvia was granted licenses with fees and royalty rates that reflected the market opportunity and competition that Nuvia would bring to ARM's business; 2) In order to safeguard ARM's business, they needed to ensure that Nuvia couldn't transfer the technology developed under that license to someone else.
Let's look at this from ARM's perspective for a moment. ARM has major customers like Qualcomm that license chip designs. Let's say that Qualcomm is 30% of ARM's business. Let's say that architecture licenses cost 25% of what chip licenses cost. If Qualcomm can migrate from a chip license to an architecture license, then ARM loses 22.5% of its business. Let's say Qualcomm already has an architecture license because it got in on the ground floor in 2008 and there's nothing ARM can do about that. So there's always the huge threat that Qualcomm develops its own designs and ARM loses that huge portion of their business.
Now, Nuvia comes along and wants to build custom designs based of an architecture license. ARM's first thought is "Hell no! You'll just sell the designs to Qualcomm once you've proven them out." Instead, Qualcomm says "Ok, you can build the custom designs, but we get veto power over anyone acquiring the tech you build with our licenses - even if the acquirer already has licenses from us." Nuvia agrees to these terms. Their idea is that they're going to become the company to buy ARM server chips from - server chips that will be faster and more power efficient than Intel chips.
Years go by and it's hard to bring a product to market and Qualcomm comes around with a bucket of money (and a desperation to both compete with Apple and avoid being commodified by MediaTek and others licensing the same cores). Nuvia sells to Qualcomm. ARM now says "Wait a second, we didn't agree that you could transfer the tech you developed to Qualcomm. You agreed that you wouldn't do that!"
Qualcomm doesn't need Nuvia's license. Nuvia needs ARM's permission to transfer their tech to Qualcomm - because they agreed to that term (ARM alleges). Qualcomm's license (ARM alleges) doesn't allow them to incorporate ARM-based tech developed at third-party ARM licensees. The license was valid when the design was created, but it was specifically licensed only for Nuvia's use with a prohibition against being sold to a third party. When I buy a license for a movie, I can watch it in my living room, but I'm legally prohibited from exhibiting it in a theater. Licenses can have restrictions.
> And having the designs destroyed because of this wrinkle seems pretty rich.
That seems pretty reasonable to me. Qualcomm is looking to move its products forward by years based on these designs that ARM alleges Qualcomm isn't allowed to use. If Qualcomm isn't allowed to use those designs, what should the remedy be? An alternative would be that ARM could get an extremely high royalty rate on all future Qualcomm chips, but that would likely be more detrimental to Qualcomm than destroying the designs. As others have commented, it seems likely that Qualcomm will negotiate a settlement with ARM. Maybe Qualcomm could pay high rates for 3 years to compensate ARM while being able to get to market sooner and protect themselves from MediaTek and others. At the same time, ARM somewhat knows that even if the designs are destroyed, Qualcomm could likely get back to their current position in 3 years time given that they have the Nuvia employees and the resources of Qualcomm. That would let both sides move forward.
> Instead, Qualcomm says "Ok, you can build the custom designs
although you can make a contract for (almost) anything, it's surprising to me that N would agree that A could forbid use of N designs. the most friendly and reasonable terms would be A demanding to be paid as much as N paid (or would have paid) for the IP in those designs. even renegotiating modestly to reflect Q's different role in the market.
it's the virality that's surprising here. even though N designs must have different from A's IP, A demands to destroy it?
Q should demand to audit A's IP to ensure that A has destroyed any benefit they got from the collaboration with N.
Why would the architecture license be less than the off-the-shelf chip license? If that were the case, I think youd see a lot more people designing cores.
Why? Designing fast and efficient cores is difficult and expensive. Almost certainly more expensive than licensing a pre-designed core. You've got to have a clear business need and the money (and expertise) to do it.
And it seems like architectural licenses are essentially all bespoke agreements with Arm rather than standardized so who knows what else might be in there.
I think it makes sense to ask for an extreme remedy in your suit in order to anchor perceptions and get a more desirable settlement/judgment eventually.
I.e. "make an example out of them"
My understanding is that they are targeting design work that took place after Nuvia's license was terminated.
>Arm terminated Nuvia’s licenses in March 2022. Instead of getting a new license, Nuvia and Qualcomm continued to develop processors based on the Phoenix core, which is a breach of license agreements, according to Arm.
https://www.tomshardware.com/news/arm-sues-qualcomm-and-nuvi...
If they don't have the special ARM license that lets you design your own compatible cores, then this case seems like a slam dunk for ARM.
However, if they do have that license, then the only objections I can see are either...
- Nuvia's license should terminate so that ARM can renegotiate with Qualcomm for whatever fields of endeavor aren't covered by Qualcomm's existing agreement
- ARM does not believe architectural licensees should be able to transfer technology amongst one another
The former seems reasonable, but Qualcomm already pays a lot of money for licenses in ARM's major markets already. I'm not sure what more they could justify here. The latter would be absolutely insane and toxic to the overall ARM ecosystem.
Clearly stated in the case they do. But having a license doesn't mean you get to do whatever you want with it.
But... ARM negotiated the cost of their licenses based on the markets the chips would be sold into, with Qualcomm presumably paying a significant premium over Nuvia based on phones being a more established market. There's nothing here that prohibits Qualcomm from building a new chip using exactly the same team they bought, because they already paid buckets of cash for the privilege[0]. The only thing ARM can reasonably enforce is that they do it from scratch, and doing so requires they go and sue their own customers so they can use discovery as their compliance tool.
And suing over something that trivial seems... petty? Like, I could see chip design houses looking to RISC-V or something else if ARM gets a reputation for suing on every M&A.
[0] For the record, this is exactly the same thing Apple did. They bought a chip design firm and a CPU core design firm and had them build ARM cores and SoCs.
That was P.A.Semi, their great chip was PWRficcient (PowerPC ISA). Ironically, most of these people (who were involved in M1) are in Rivos now, a RISC-V startup.
Now, the expectation is for Qualcomm to have the engineers from Nuvia (which did ARM cores) make RISC-V cores.
This makes no sense at all. I'm trying to figure out the upside for ARM other than they earn more money on their cores. It would certainly put a large damper on the rock star chip designers since they couldn't sell their firms as easily.
The logic really doesn't make sense. If you try to use a design made by someone else with an architecture licence and you have an architecture licence, ARM has to approve it?
I guess they're trying to protect themselves as the sole seller of ARM designs, but even then Qualcomm didn't buy a design, they bought the company. ARM seems to be going overboard here.
And all while RISC-V is nipping at their heels. It's like they want to make it really clear how troublesome licencing proprietary arches is.
If you want ARM, you play by ARM's rules. Or you don't get to use the license. Either ARM is about to learn a valuable lesson about knowledge wanting to be free, or Qualcomm is the about to get beaten with the lawsuit bat.
I think it's ludicrous we even bother with this daftness, but seeing as everything has to revolve around money, it is what it is.
I just can't see Qualcomm's lawyers flubbing this one. They are an extremely aggressive company when it comes to IP and the law. It's not like they don't have top notch IP lawyers. If ARM persists in this stupidity my money is on Qualcomm tearing them a new one.
Also see a multi trillion dollar company that has to deal with onerous terms for cellular chips from Qualcomm because there is no viable alternative.
ARM seems to be the AWS of hardware IP cores. It is very much the case that if someone is basing a design off their base designs, that comes with granting ARM a thumb on the scale, and a place at the negotiating table if two of their (ARM's) customers engage in an M&A. Qualcomm licensed stuff for handsets. Nuvia licensed stuff for servers. The new composite entity is still constrained by both contracts, which requires an IP firewall.
If, on the other hand, Qualcomm wanted Nuvia due to their server core IP, and does not intend to merely consume that company's blackboxed output, then they need to renegotiate terms with ARM, either acquiring a second license for Qualcomm proper, or paying whatever fees are customary for a transferrable license.
In the end, it's unsexy paperwork.
But I get it though. If you dig into semiconductor/hardware lit, like things on logic locking, that entire industry of fabless semi-conductor fabrication has a Jesus Nut in terms of license enforcement. The prospect of physical design/mask theft or unauthorized design reproduction in a way substantially different, and much more tangible than software is. It really annoys me that someone somewhere describes this as "piracy", because it isn't really, it's straight up breach of contract/unauthorized use of physical design masks. Like getting the printing plates from a mint.
Frankly, I've been skeptical of the entire thing, because it does basically rely on manufactured scarcity/info asymmetry created and maintained through legal means, but no one exactly asked either for my input, or seems open to being told not to try to monetize something you can only collect on by essentially parking lawyers at strategic points in the business lifecycle.
From a theoretical system point of view it works. From an execution point of view... Not so much.
In fairness, ARM's ownership of the ARM ISA couldn't be an advantage very long. Much like x86, ARM is just old nowadays. Unless you're supplanting it with a half-dozen ISA extensions and additional hardware, it's a hard sell for anything other than embedded/minimalist applications. Which makes it all the more odd that ARM is picking legal fights instead of making it easier for customers to adopt their (proprietary!!!) instruction set. My untrained, unsolicited opinion is that ARM is just pivoting to support their pre-existing customers and lock-down the money makers.
I disagree: ARM64 is from 2011, it's not that old and it was a significant ISA makeover.
Abandoning all that for a fixed-length 32 bit opcode 64 bit instruction set with just barely better code density than original ARM (and dropping the stuff that made sense in 1985 but doesn't today, such as predication everywhere and load/store multiple) just looked like lunacy to me in 2012 when I read the Aarch64 manual, and looked even worse when RISC-V came out with a 64 bit instruction set using the same basic idea as Thumb2.
If you're doing very wide instruction decode then two instruction lengths is a little harder to handle then one, but not enough to matter, at least at 8- or 16-wide. You can EITHER 1) put a 2:1 32 bit mux in front of half of the decoders if you don't want much extra hardware, OR 2) build 50% more decoders and put bigger 2:1 muxes on the outputs of the decoders. The latter is slightly faster because you have to examine 2 bits out of each 16 bit parcel in the instruction stream to decide which mux input to choose, and option 2) lets you do that in parallel with the decoding instead of having to do it before the decoders.
It's just completely incomparable to doing wide decode on x86_64 where you have to deal with 1-15 byte instructions with an arbitrary number of prefix bytes and several opcode bytes to decode before you know the length of an instruction, and therefore where the next instruction starts. If the first instruction starts at offset 0 then the second instruction can start anywhere from offset 1 to 16, the third instruction can start anywhere from offset 2 to 31, the fourth instruction anywhere from offset 3 to 46 etc.
Focussing on desktop and servers.. It worked.
In a similar fashion RISC-V has things which makes little sense for "high performance" (16-bit aligned 32bit instructions with the C extension, too simple addressing mode) which shows that their main goal is embedded..
Such as?
>(16-bit aligned 32bit instructions with the C extension)
For virtually no cost (see brucehoult reply to my parent post), it brings greatly increased code density, which means more code fits in L1, or same thing, that you can make it smaller and clock it higher. This actually benefits high performance microarchitectures greatly.
See M1's L1 size for an example of why ARMv9 AArch64 is mind-blowingly bad. ARM's literally lost its marbles.
>(too simple addressing mode)
More complex addressing modes were evaluated and discarded, as they only brought harm, no benefit.
This is a pattern in RISC-V, where decisions were made after careful weighting, rather than some individual's favored way of doing things.
Presumably similarly troublesome to licensing SiFive's proprietary IP?
ARM architecture licences are used when you want to do a largely complete re-implementation of the arch, so the instruction set is really the only issue.
Anyone who wants to can design and sell their own RISC-V implementation (as Nuvia and Qualcomm paid ARM [1] to do with the ARM ISA) without asking anyone for permission, without telling anyone if they don't want to, and without paying anything to anyone.
[1] just, apparently, not enough
When the iTunes Music Store was introduced back in 2003, not only was it a better alternative because it was more convenient. But you also didn’t risk being sued.
Before anyone chimes in, “by pirating I can get DRM free music”, Apple has sold DRM free music on iTunes since 2008.
Also, it’s not like Qualcomm has any alternatives to ARM. No the entire mobile market is not going to move to RISC-V.
I wouldn't want to bet too much on that. If anything, the effective stranglehold on phone SoCs that Qualcomm has gives them more power on this issue. Qualcomm is pretty much the only vendor powerful enough that they could tell Google that continued performance improvements to phone SoC performance would be contingent on switching ISA to RISC-V. Much of the hard work in getting Android to support RISC-V has already been done by Alibaba.
Samsung isn't big enough to force a switch on their own, especially not it if would result in a mixed architecture product line. But if Qualcomm wanted to?
I don't think such a switch is _likely_, but it is _possible_, and ARM screwing around with one of its largest and highest-profile customers (especially one known for aggressive legal action and a very short-term notion of compatibility) is a good way to make such a switch look more appealing.
Really, it seems to me that ARM really has only one possible good outcome from this: a settlement where Qualcomm pays them a bit of money. If they actually win, that maybe benefits ARM's in-house design teams and TLA licensing business in the short term, but it basically guarantees that ALA licensees in the server space look at switching ISAs.
Google sold only 1.2 million Pixel phones last quarter in the US
https://9to5google.com/2022/05/19/pixel-6-us-market-q1-2022/
Compared to Apple’s 20 million
While Google doesn’t break out sales of Pixels. The best estimate I could find is around 2.5 million a quarter globally.
https://9to5google.com/2022/05/11/the-pixel-6-sold-more-than...
Or about the number that Apple sells in 3 days.
The US market is 3rd largest behind India and China or 4th if you count the EU as one market.
But in the US, iOS has about a 60% market share and it dominates the high end. People who are buying cheap $261 or less Android phones aren’t looking for performance.
https://www.statista.com/statistics/951537/worldwide-average...
Not to mention that Google is non existent in China - the worlds largest market.
The market for high performance Android phones in the US is particularly small. Android phones are so far behind in performance now that even the low end iPhone SE benchmarks better than high end Android phones.
This is the same reason that no chip maker even tries to make processors that are as performant for Android Watches as the Apple Watch. Android devices have been a commoditized race to the bottom for a decade.
This entire lawsuit, one could argue, centers around the belief by some vendors (Qualcomm, Nuvia, etc) that in-house designs - even those made by small teams - can significantly outperform the designs that ARM produces and makes available via TLA licensing, and that (implicitly) the pace of ARM's own development is not fast enough or reliable enough to be competitive in the markets these vendors want to operate in.
The last decade is littered with OEMs trying to produce “high end” Android phones. Not enough people would buy them to make it a sustainable business.
I’m not making a value judgment on them. Most people are fine with a sub $100 unsubsidized Android phone like the ones selling in developing countries and in the US.
Maybe the logic is different for ARM. Maybe they really badly negotiated licenses with Qualcomm and they need to work around that, or they want to protect Cortex core licensing from some hypothetical Snapdragon with a good CPU. However, by doing that you are undermining your own reputation. Nobody wants to be known as Mr. Litigious.
[0] Or at least, Steve Jobs said so in his open letter on DRM. They had telemetry in iTunes and knew how full iPods were versus how many songs people bought.
His exact words on his “Thoughts on Music” letter were.
https://macdailynews.com/2007/02/06/apple_ceo_steve_jobs_pos...
> Today’s most popular iPod holds 1000 songs, and research tells us that the average iPod is nearly full. This means that only 22 out of 1000 songs, or under 3% of the music on the average iPod, is purchased from the iTunes store and protected with a DRM. The remaining 97% of the music is unprotected
Each Arm ALA (Architecture License Agreement) grants the licensee only the right to design CPUs for a specific purpose.
If the licensee has a license for a server CPU and it attempts to sell the designed CPU as a laptop CPU, Arm claims that the original license is terminated and everything designed under that license must be destroyed, unless a new license is negotiated with Arm, allowing the licensee to design and sell laptop CPUs.
In the filing, Arm says: "Qualcomm’s Arm licenses do not cover products based on or incorporating Arm-based technologies developed by third parties under different Arm licenses, such as the now-terminated Nuvia licenses".
Wouldn't the outcome of the case depend on the judge's interpretation of the contracts then? I can't imagine Qualcomm with their attack-dog lawyers missing something like this.
[1] https://www.tomshardware.com/news/arm-sues-qualcomm-and-nuvi...
ARM has had something of a secure niche until recently - markets that Intel ignored or did poorly in. But now there is renewed competition from x86, attractive alternatives (and perhaps even momentum) behind RISC-V, still MIPS buzzing around. And anyone who is serious enough can engineer their own ARM-compatible chips without licensing entire cores from ARM.
So this really puts some focus on ARM having to produce a steady stream of superior products. Can they? I guess the thing with NVidia was a major distraction...
https://s3.documentcloud.org/documents/22273195/arm-v-qualco...
I find it interesting that Arm Ltd. has demanded a trial by jury. I would have thought that as a risk in a case which depends on interpreting correctly the wording of a business contract.
See folks moving from
PowerPC - AMD Zen , Dec Alpha -> AMD Zen/Intel Core , PowerPC -> Apple SOC
These same folks from P.A.Semi / PWRficcient then Apple / M1, moved on to a RISC-V startup, Rivos.
That's gonna be interesting.
Qualcomm dominates the high-end, high-margin ARM chip market (the part that uses ARM designs). They also invested a bunch into SiFive and the SiFive CEO is from Qualcomm. By pushing for the entire Nuvia design to be thrown out, ARM is aiming for the 1.5B acquisition jugular.
I'm sure that there's at least idle talk about what to do if ARM wins or demands huge royalties in a settlement. Porting their design to RISC-V means keeping most of their work. It means they have a better negotiation position with ARM moving forward for other designs. It also increases their negotiation position with SiFive in the future (maybe even giving them enough positioning for an acquisition).
The market is already shifting toward RISC-V with MediaTek (largest Android low-end chip maker) creating a wholly-owned corp that is doing RISC-V designs. The JVM port is now mainlined and Alibaba has made a ton of progress with their Android port. China and India are both pushing hard for RISC-V too.
Meanwhile, RISC-V is moving hard into the embedded space where it's simplicity translates into a lot fewer gates while not paying 1-3% to ARM means either increased profits or more competitive pricing.
Qualcomm announcing a RISC-V version of Nuvia could be a disastrous opening of the floodgates for ARM.
TL;DR -- What a great time for ARM to prove to the world how switching to an open ISA would eliminate a lot of these bureaucratic issues.
They are exemplifying why "copyleft" hardware specs are better and companies notice. If ARM isn't materially better than RISC-V, why not switch and eliminate the problem?
It's about as tone deaf as when they created that RISC-V attack site a few years ago.
If this induces companies to switch, even winning the case would be a pyrrhic victory.
So you cannot have all the good things. You have to choose between a nice ISA with an ugly license and an ugly ISA with a nice license.
Aarch64 instructions are on average bigger than RISC-V ones and sometimes do slightly more work, but the complicated ones are split into µops and the number of clock cycles ends up similar. RISC-V code is demonstrably a lot more compact than ARM -- download any Linux distro that supports both (Debian/Ubuntu, Fedora...) and compare binary sizes. The RISC-V ones are consistently 20%+ smaller, despite currently still using the original RV64GC ISA. Binaries using the new stuff ratified in November last year will be smaller again.
In similar µarches, RISC-V cores are faster than ARM cores. The SiFive U74 is faster than the ARM A55 (not to mention A53). The P550 is faster than the A76. M1-class RISC-V is coming -- often worked on (e.g. at Rivos) by many of the same engineers and managers who made M1.
Nuvia was ARM's great hope for a competitive core that wasn't Apple-internal.
I don't see how ARM can make Nuvia delete their plans. They can stop them selling the results, sure.
What prevents Qualcomm converting the existing µarch work to RISC-V? Nothing that I can see. The ISA are very similar. It's mostly just a different instruction decoder and CSRs and delete a few things such as the condition codes.