Qualcomm completed its defense, calling an expert witness and its CEO, Cristiano Amon as well as other people via recorded interviews, including former Arm CEO Simon Segars. On Day 2, Arm made a strong case, showing documents evidencing that Nuvia violated its confidentiality agreement and that the term Arm Technology covered the entire Nuvia design. Thus, the pressure was on Qualcomm to demonstrate otherwise. Highlights include:
- More point scoring, as on Day 1. Qualcomm again used the Arm paper trail to show Arm’s initial position on the Nuvia acquisition was less combative and that it understood its cores’ performance was falling behind Apple’s. Arm reciprocated by presenting internal Qualcomm communication saying they were more concerned about the price of licensed (TLA) cores than their performance. Further, Qualcomm discussed telling Arm it was working on a custom (ALA) core to pressure Arm to lower TLA-core prices. Arm didn’t gain anything from that latter revelation because Qualcomm ultimately followed through on the custom-core threat by acquiring Nuvia.
- Documentation of other Arm shenanigans emerged. A few years ago, the Financial Times reported that Arm intended to stop licensing to chipmakers and license to system companies instead. Semiconductor companies would still make chips with Arm cores, but the OEMs would pay royalties on the basis of system price, boosting Arm’s revenue. Qualcomm’s phone-centric licensing business operates this way, but it’s not clear how it would work for Arm in other markets such as automotive. Qualcomm supplied communication from Samsung on this strategy, revealing one of those two companies had leaked the information to FT. At the time, the public disclosure of this strategy boosted interest in RISC-V beyond the level instigated by the potential Nvidia takeover of Arm.
- A few financial tidbits appeared. In 2013, Qualcomm paid $40 million to Arm for an architecture license. Initially it thought it could buy Nuvia for a generous $500 million and that annual CPU-development costs would be $50–70 million. To land the startup, it paid $1.4 billion but computed that would be its annual savings from paying Arm ALA instead of TLA royalties. (Arm is generating about $2.1 billion annually from external customers, and less than half of that comes from the U.S. Either Qualcomm’s math is off or it anticipates huge growth.) As for a $70 million ongoing operating expense, a company can dream, can’t it?
- Qualcomm’s expert witness couldn’t convincingly refute Arm’s evidence. USC and UCLA professor Murali Annavaram asserted that microarchitecture is separate from architecture, and thus the Nuvia design was largely shielded from Arm’s claims to it. Among various explanations, he revisited the earlier statement from Nuvia CEO that the decoder is automatically generated. However, he didn’t clearly disprove Arm’s claims. The Qualcomm legal team should’ve set him up better and should’ve found other documentary evidence with alternative definitions of Arm Technology. They flashed such evidence on the screen for jurors but didn’t recognize it as such, much less press the point.
- The last to testify, Cristiano Amon wasn’t set up to close the evidentiary presentations. Qualcomm got the last words in this trial phase but hadn’t shown solid evidence for Amon to reiterate. Instead, he punctuated Day Three with statements about the limitations of his and Arm’s piano-CPU metaphor.
Bottom Line
Day 4 will be closing statements. Each side will make its final case based only on evidence already presented. Neither side has argued well, but Arm has been the more effective party. As noted in our Day 2 coverage, we think in fact Arm is wrong but has proven its case in court. As noted above, Arm’s actions previously spurred waves of RISC-V interest. The jury may say that the Nuvia microarchitecture is Arm’s technology, but a little engineering work could make it equally a RISC-V technology. In that case, Arm’s victory would be Pyrrhic.
For further commentary, see posts at https://www.linkedin.com/in/whoisjoe/ and https://bsky.app/profile/xpu.news.