Qualcomm shares experienced a significant drop of nearly 5% in premarket trading following a report from Bloomberg indicating that British chip designer Arm is considering revoking a crucial license held by the U.S. company.
According to the report, Arm has issued Qualcomm a 60-day notice of termination for their architectural license agreement, which allows Qualcomm to develop chips based on Arm architecture.
Arm’s business model involves licensing out blueprints that other companies use to create semiconductors.
Qualcomm has been a key player in the semiconductor industry, utilizing Arm’s architecture to design its chips.
When contacted for a response to the report, Qualcomm did not immediately provide a comment. Arm also declined to offer any statement on the matter.
This development has the potential to have a significant impact on Qualcomm’s operations and future chip designs.
As this story continues to unfold, it is advised to stay updated on any further developments regarding this issue.