07
Oct

Qualcomm vs. Arm Trial, Day 2 – ALA Commitments and Bloomberg leak in focus

Check out the coverage of Day 1 here: Opening Statements, CEOs take the stand
Summary of Day 2:
Today’s testimonies were mainly focused on the ALA commitments and the circumstances around the leak of Arm’s notice to Bloomberg News. The day included in-person testimonies from CEOs Rene Haas and Cristiano Amon, Arm’s Chief Architect Richard Grisenthwaite, then account manager Lynn Couillard, Qualcomm’s Sr. Director of Verification Jignesh Trivedi, as well as video testimonies from Arm’s CMO Ami Badani, product manager Martin Weidmann, PR agency FGS Global’s Paul Kranhold, and Morrison & Foerster LLP’s Kenneth Siegel.
Through various testimonies, Qualcomm reiterated that Arm’s commitment to ALA is faltering, and OOBs and patches were part of the contract deliverables. Arm pushed back, saying it was looking to revise ALA contracts to reflect current market realities, and OOBs and patches were not mandatory contract deliverables, and that Qualcomm didn’t show any harm.
The discussion around the Bloomberg leak got a lot of attention today. Qualcomm did a great job showing that the leak was planned through Arm’s PR agency and timed to align with Qualcomm’s Snapdragon Summit.
Key points from Rene Haas’ Testimony (continued):
  • Didn’t recall anything related to leaking the letter to Bloomberg, and insisted the letter timing was to align the 60-day mandatory notice period to the last day of the trial (first case)
  • Did not tell anybody in Arm to stop the support to Qualcomm, didn’t want to support anything related to Nuvia
  • Talked to the media about the notice to explain Arm’s position before anybody else
  • Mentioned EOL (End of Life) of ALAs, and said ALA and TLA rates should be similar
  • Have talked to many companies regarding providing chips, e.g., discussion with Waymo to replace x86/Intel chips with Arm
  • Clarified his comment “unwinding ALA” meant revising the ALA rates, not abandoning
  • Said – Best Arm chips should come from Arm
  • Was not happy with Qualcomm promoting RISC-V
  • Agreed that compliance is critical for Arm’s success
Testimony is not yet complete. To be continued tomorrow
Key points from Cristiano Amon’s testimony (continued)
  • 44 – 46% of Qualcomm’s revenue comes from Chinese OEMs; Strong interest in RISC-V from China
  • RISC-V is good for microcontrollers, wearables, glasses, etc.
  • Arm showed a couple of Qualcomm’s RISC-V roadmaps to highlight Qualcomm’s support for the technology:
Phase-I: Wearables; Phase-II: Automotive; Phase-III: PC, Smartphone, Data Center
1st RISC-V Data Center chip in 2029; 1st Value Tier Smartphone chip in 2029;
1st Premium Tier Smartphone chip in 2031
No comments were solicited by Cristiano about these projections
  • Apple pays 30cents/chip ALA rate; Qualcomm’s rate capped at $1.88 /chip – Arm pointed out Apple is a single vendor customer
  • For v10, Qualcomm is ready to pay up to 5% above the best rate Arm offers to others, and also open to different rates for various segments (Mobile, Wearable, Compute, Auto, Data Center)
Key points from Richard Grisenthwaite and Martin Weidmann’s testimonies
  • Long discussions and back-and-forth on Arm releases, verification, and compliance process
  • Said the documentation supplied with the compliance kit (ACK) is sufficient, and Qualcomm can generate the same reports with the tools provided; no additional support needed
  • Reiterated OOBs and patches are not mandatory for compliance; Quarterly releases are sufficient
  • In one of the emails, Martin Weidmann had mentioned that OOBs have become a part of the contract
Key points from Jignesh Trivedi’s testimony
  • Another long back-and-forth on the verification and compliance process
  • ~65k tests for compliance; OOBs are specific to a CPU design, quarterly releases can’t cover them
  • Insisted that without OOBs and patches, Qualcomm might be shooting in the dark, not knowing whether the design is fully compliant or not; Also might over- or under-test
  • Claimed lack of OOBs and patches increased the workload of Qualcomm engineers and potential risks – compliance problems can’t be fixed in the field
  • No documentation from Qualcomm to quantify the additional effort because of the absence of OOBs and patches
  • No visible harm to Qualcomm – chips were not delayed, no compliance issues after designs were commercialized
Key points from Ami Badani, Paul Kranhold, Paul Kranhold and Kenneth Siegel’s testimonies
  • These video testimonies entirely focused on the Bloomberg leak
  • Ami said that she didn’t see the letter before and was not involved in showing the letter to Bloomberg; Thought it was important to inform customers and partners about the topic
  • Arm’s PR agency’s Paul Kranhold showed the letter to Ian King of Bloomberg
  • It was not made clear that the letter was an intent to cancel the license (later withdrawn), and there was a 60-day cure period
  • Arm claimed that the timing of the notice was to coincide with the conclusion of the upcoming trial between the companies (first case). But it was pretty apparent that it was also to coincide with Qualcomm’s Snapdragon Summit
  • Arm reps also actively shared the Bloomberg article with other outlets like the Financial Times
Key points from Lynn Couillard’s testimony
  • Qualcomm’s ALA had a provision to extend the contract for 7.5 more years to cover new Arm technologies
  • Qualcomm expressed interest in extending the license to get access to v10, and separately asked for Arm’s plans for v10
  • Lynn, being Qualcomm account manager, pursued both of these requests from Qualcomm within Arm, but didn’t get any response
Tantra’s take:
I think Qualcomm made a strong case around the timing and leakage of the license letter. It also raised some questions about Arm’s long-term views about ALA. The bigger question is how that will affect v10 licensing. That discussion started with Cristiano’s testimony today and will continue with Rene’s testimony tomorrow.
From Arm’s side, they have made a strong case in pointing out the lack of proof of harm. Whether OOBs and patches are part of the contract is still an open question; both parties have made strong arguments for their side.
Be sure to come back here tomorrow to read about Day-3’s highlights.