Qualcomm CEO Christiano Amon told the company board that purchasing Nuvia would save up to $1.4 billion annually in Arm royalties. This revelation came during the Arm vs. Qualcomm trial, where Arm alleges that Qualcomm's Snapdragon X chips infringed on its patents.
The Nuvia Acquisition Strategy
Amon justified the $1.4 billion acquisition of Nuvia in 2021, explaining that it was designed to reduce Qualcomm's reliance on Arm designs and to compete more effectively with Apple's Bionic chips. He also aimed to challenge Intel's dominance in the laptop market. Finding no alternative to Arm, Qualcomm saw Nuvia as the answer when former Apple engineers founded it in 2019.
Initially, Amon tried to get Nuvia to design cores for Qualcomm. However, he opted to simply buy the company outright when that failed. The board was hesitant, as Nuvia had no products at the time and was focused on server chips. To win them over, Amon argued the purchase could save Qualcomm $1.4 billion yearly in Arm royalties. This estimate was based on the assumption that the Snapdragon X chips would capture a large share of the laptop market upon release. However, only 720,000 Snapdragon X units were sold in the first full quarter of sales, representing just 0.8% of the market.
Arm's Perspective and the Ongoing Lawsuit
Arm claims it is missing out on $50 million in annual revenue because Qualcomm did not renegotiate its contract after the Nuvia acquisition. Arm argues that Qualcomm should destroy all Nuvia designs developed before the acquisition.
Qualcomm insists its license agreement with Arm covers all Nuvia acquisitions and accuses Arm of attempting to compete with its own clients by developing in-house chips.
Arm is aggressively defending its business model of licensing agreements. If Qualcomm were to save at least $50 million due to Nuvia, other clients could follow suit, threatening Arm's revenue. The court's decision remains to be seen, with closing arguments happening soon.
