Arm Holdings (ARM) has reportedly given Qualcomm (QCOM) a 60-day notice of termination for its architectural license agreement. Moor Insights & Strategy founder, CEO, and chief analyst Patrick Moorhead joins Market Domination Hosts Julie Hyman and Josh Lipton to explain the complicated relationship between the chip-related companies and what he expects in the pair’s ongoing dispute. Moorhead says “Qualcomm and ARM very much have a symbiotic relationship. Qualcomm is likely Arm’s largest customer. Having a supplier suing its biggest customer, it's a big deal.” He explaining the licensing dispute “goes back years and years ago where Qualcomm used to have an architectural license from Arm where they would develop and design their own chips, very similar to what Apple (AAPL) has today. And then there was a period where Qualcomm licensed design more on a royalty basis, more fit-for-purpose designs. And then, a few years back, Qualcomm bought a company called Nuvia... and that had a certain license agreement with it.” “What the two companies are debating here is which of the license agreements goes into effect right now. Is it the one that was with Nuvia? Or is it the agreement that it had prior with Qualcomm? And obviously, Arm thinks it's the larger number on the architectural license, and Qualcomm, they believe it's the smaller of those numbers.” Moorhead expects the feud will be settled out of court, though a court date is set for December 16. “None of these companies want to take this to court… This is not good for the industry. Their customers don't don't like this.” The analyst says that if the feud persists, it could push customers to competitors like Intel (INTC) and Advanced Micro Devices (AMD).
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