A federal jury in Wilmington, Delaware, found this week that Arm Holdings breached a licensing agreement with Qualcomm and "negligently" interfered with Qualcomm's business relationship with Meta Platforms — but awarded Qualcomm just $2 in damages for the breach, Reuters reported. The verdict caps the second trial between the two chip companies in under two years and leaves the biggest financial question in the case — whether Qualcomm can stop paying Arm royalties for five years — still undecided.
The five-day trial centered on Qualcomm's claims that Arm withheld software patches and design tools it was contractually required to provide, and separately violated a pricing-protection clause meant to guarantee Qualcomm paid within 10% of the lowest price Arm charged for its processor designs. Qualcomm also accused Arm of trying to sabotage its relationship with Meta by leaking a 2024 breach notice to Bloomberg. Arm's defense argued Qualcomm had suffered no real harm and cast the lawsuit as a negotiating tactic. "They were not harmed in the least," Arm's attorney, Gregg LoCascio, told jurors.
"It's really bad because Qualcomm's entire chip business depends on Arm and on Arm honoring its contract and honoring its promises."
Karen Dunn, attorney for Qualcomm
A Relationship Strained Since 2016
Qualcomm and Arm's falling-out dates back to SoftBank Group's 2016 acquisition of Arm, after which the company began shifting from purely licensing chip architecture to designing and selling its own chips — putting it in more direct competition with longtime licensees like Qualcomm. The current license for Arm's computing architecture runs until 2033, and the companies are still negotiating terms for Qualcomm to use newer versions of that architecture. Both CEOs, Qualcomm's Cristiano Amon and Arm's Rene Haas, testified at this week's trial, as they did in a December 2024 case in which a different jury rejected Arm's claim that Qualcomm had breached its license through its $1.4 billion acquisition of chip startup Nuvia.
A related, judge-only trial held the same week examined whether Arm is negotiating in good faith over those newer licensing terms, with a ruling from U.S. District Judge Maryellen Noreika expected later. Noreika has also not yet decided whether a contract clause lets Qualcomm withhold royalty payments for five years if a breach is proven — a ruling that matters far more to Arm than to Qualcomm. Arm's annual filings show Qualcomm accounted for roughly 9% of its $4.92 billion in revenue in the fiscal year ended March 2026, or about $443 million, a sum equal to nearly half of Arm's annual operating income.
What Happens Next
The nominal damages award suggests the jury accepted Qualcomm's breach claims without finding significant financial harm, leaving Noreika's pending rulings on the royalty clause and the good-faith negotiation dispute as the decisions likely to matter more to both companies' bottom lines. Arm has signaled it may appeal, consistent with its response to the 2024 verdict, while Qualcomm has treated each courtroom win as validation of its right to keep building chips on Arm's architecture without renegotiating from a position of weakness.
