Qualcomm’s purchase of Nuvia would have saved the company US$1.4 billion in royalties

Qualcomm’s acquisition of Nuvia, carried out in 2021 for US$1.4 billion, promised to revolutionize the processor market. However, new details revealed in the trial between ARM and Qualcomm indicate that the results did not live up to initial expectations. While Qualcomm aimed to save on royalties and challenge Intel and Apple, the impact of the strategy still generates fierce discussions.

At the time of the acquisition, Qualcomm’s CEO, Christiano Amon, justified the high investment to the board with the projection of annual savings of up to US$1.4 billion in royalty payments for ARM.

The purchase of Nuvia was seen as the key to reducing Qualcomm’s dependence on ARM architectures, which, until then, were indispensable for its Snapdragon processors.

Despite the optimism, the first generation of Snapdragon X chips did not achieve the expected performance in the notebook market. Only 720,000 devices equipped with the processor were sold in the third quarter of 2024, which represented less than 1% of the global market.

“Snapdragon X’s below-expected performance raises doubts about Qualcomm’s strategy”

The clash between Qualcomm and ARM is the result of disagreements over the use of licenses. ARM argues that Qualcomm should renegotiate contractual terms after the Nuvia acquisition, citing annual losses of around $50 million in royalties.

On the other hand, Qualcomm argues that current licensing covers all designs acquired from Nuvia and accuses ARM of seeking to monopolize the market by planning to develop its own chips.

The tension in the sector is evident considering the growing interest in CPUs based on ARM architecture. Projects such as the first mini PC with Snapdragon X Elite, developed by Geekom, show the potential for innovation, but also highlight the challenges faced by Qualcomm.

Qualcomm’s future in the CPU market

Although the acquisition of Nuvia was seen as an alternative to reduce costs and gain autonomy in the CPU market, the results so far demonstrate that the transition is not simple. THE

Qualcomm had even considered buying Intel, but opted for the more “simple” acquisition of Nuvia to avoid regulatory complications.

“Qualcomm’s future in the CPU market will depend on much more than acquisitions – it will depend on execution”

With the trial between ARM and Qualcomm reaching its final stages, the result could define the future of Snapdragon X processors and also ARM’s own business model, which currently depends on licenses.

Meanwhile, the market awaits Qualcomm’s next moves in the fight for a more significant space among the sector’s giants.

Source: Tom’s Hardware