Qualcomm (QCOM) will have to wait until at least Tuesday, October 13, to learn whether a jury agrees that Arm Holdings (ARM) broke their licensing agreements. Jurors in Wilmington, Delaware, deliberated for about four hours on Friday, October 9, without reaching a verdict, Reuters reported.
That leaves the biggest number in the case undecided. Qualcomm wants Judge Maryellen Noreika to rule that a clause in its contracts lets it stop paying Arm royalties for five years if a breach is proven. She hasn’t ruled yet.
What Qualcomm Says Arm Did
- Qualcomm claims Arm withheld software patches and design tools it owed under contract.
- It says Arm broke a promise that Qualcomm would pay within 10% of the lowest price for Arm’s processor designs.
- It says Arm leaked its 2024 threat to cancel Qualcomm’s license, hurting talks over a chip deal with Meta Platforms (META).
- Arm told jurors Qualcomm suffered no harm, and it argues the five-year royalty clause is unenforceable.
How Big Qualcomm Is to Arm
Arm’s annual filing says Qualcomm accounted for 9% of its $4.92 billion revenue in the fiscal year ended March 31, 2026, or approximately $443 million. Holding that annual contribution constant gives about $2.2 billion over five years. However, this includes license fees as well as royalties, so it is a scale comparison—not an estimate or ceiling for the disputed royalty payments.
That sum lands very differently on the two income statements. Arm’s operating income was $908 million last fiscal year, so Qualcomm’s payments equal about 49% of it. Qualcomm earned $10.43 billion in operating income over the last twelve months (LTM), which puts the same payments at about 4%.
The same relationship weighs far more on Arm’s income statement than on Qualcomm’s.
The Next License Is the Bigger Fight
The holiday may never happen. Qualcomm has to win on breach first, and if Noreika strikes the clause, it can only seek ordinary damages.
Pricing is where Arm’s real exposure sits. At trial, Arm’s lawyer pressed Qualcomm CEO Cristiano Amon on a 2013 deal. That deal caps royalties at $1.88 per chip for any chip with at least five CPU cores, a price set long before data center chips carried 288 cores. A breach finding would weaken Arm’s hand in talks over its next architecture, which a separate bench trial is reviewing for good faith.
The Royalty Ruling Matters More to Arm Than Qualcomm
Two decisions settle this:
- whether jurors find a breach
- whether Noreika lets the five-year clause stand
Without the five-year remedy, a breach finding only opens a damages claim, and Qualcomm would still have to prove the amount. If Noreika upholds it, Qualcomm could stop paying royalties for five years to a supplier that counts it as 9% of revenue.
That imbalance is why the clause ruling matters more to Arm. Qualcomm’s entire payment to Arm is about 4% of its LTM operating income. For Arm, the same relationship equals about half of its operating profit, which makes the clause ruling the one Arm holders should watch once jurors return on Tuesday, October 13.
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