The legal issues between Arm and Qualcomm are heating up, with Arm canceling Qualcomm’s license to make Arm-based chips.

Legal issues between the two companies began when Qualcomm purchased Nuvia, a semiconductor design firm that was founded by former Apple engineers. Nuvia had a license to design Arm-based chips and was creating some innovative designs, which Qualcomm wanted to help it close the gap with Apple’s M-series chips.

In the course of the acquisition, Qualcomm allegedly attempted to transfer Nuvia’s Arm licenses to itself without getting Arm’s approval first, something that’s against the terms of Arm’s terms, as the company pointed out when it sued Qualcomm post-acquisition.

Arm is filing this claim to protect Arm, our partners, and the unparalleled ecosystem we have built together. Arm and its partners have invested billions of dollars to create industry-leading intellectual property. 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. In contrast, Qualcomm has breached the terms of the Arm license agreement by continuing development under the terminated licenses. Arm was left with no choice other than to bring this claim against Qualcomm and Nuvia to protect our IP, our business, and to ensure customers are able to access valid Arm-based products.

Needless to say, Qualcomm disagreed with that assessment, saying its license gave it the right to do what it did.

“Arm’s complaint ignores the fact that Qualcomm has broad, well-established license rights covering its custom-designed CPU’s, and we are confident those rights will be affirmed,” Ann Chaplin, General Counsel of Qualcomm, said in a statement at the time.

Arm appears to be upping the ante, notifying Qualcomm that it is revoking its license altogether. According to Bloomberg, Arm has given Qualcomm the mandated 60-day notice it is required to give licensees before canceling their license.

The move could have a profound impact on the PC and mobile market, given the hundreds of millions of semiconductors Qualcomm sells each year, and the company’s dominance in some markets. Most Android phones, for example, rely on Qualcomm processors.

Within the PC market, Qualcomm losing its Arm license would be a devastating blow to Arm-based PCs, especially given the fact that Qualcomm has had an exclusive license with Microsoft to produce them. Microsoft has bet heavily on Qualcomm, even using its Snapdragon chip as the basis for its first-gen Copilot PC.

It’s unclear what Arm’s ultimate goal is, but Bloomberg believes it trying to force Qualcomm to pay more than Nuvia was for its license.

“Arm’s move to cancel Qualcomm’s architectural license looks like an effort to gain leverage in advance of the parties’ Dec. 16 trial,” Bloomberg Intelligence analysts Tamlin Bason and Kunjan Sobhani wrote in a research note. “Our Thesis: Arm’s suit against Qualcomm likely ends in a negotiated license, granting the chipmaker rights to customize Arm architecture, but at higher royalty rate than Nuvia had been paying.”

However the showdown plays out, the clock is now ticking for Qualcomm to resolve its dispute with Arm before the dispute becomes prohibitively costly for the company.