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| Closing arguments in Qualcomm's trial against Arm suggest Arm's proposed v10 royalties would be many times what Qualcomm pays today. |
Closing arguments in the Arm v. Qualcomm bench trial have exposed just how far apart the two chip giants are on royalties for the next-generation Armv10 architecture — and the numbers are staggering.
According to figures stated in open court on October 20 before U.S. District Judge Maryellen Noreika, Arm's proposed v10 royalty rates would amount to between 12.8% and 29.5% of the selling price of a $220 Snapdragon flagship chip. Under Qualcomm's current 2013 architecture license agreement (ALA), the company pays just 0.85% of that same chip's price.
The trial, which centers on whether Arm negotiated in good faith over the v10 license, has kept the actual rate models under seal. But several figures slipped out during closing arguments — and analyst John Dorbal pieced the math together in a detailed thread on X.
How Qualcomm's Current Deal Works
Qualcomm's 2013 ALA, valid until 2033, caps royalties at **$1.88 per chip** for processors with five or more CPU cores. The formula charges 1.25% of the chip's selling price, with the price used for the calculation capped at $150. That works out to about **$0.23 per core** on an eight-core Snapdragon processor — or $1.875 per chip, which rounds to the $1.88 cap.
What Arm Is Asking For
Qualcomm counsel Karen Dunn stated in court that Arm's v10 offers represent as much as a 15x increase over what Qualcomm pays today. Applied to the $1.88 cap, that equals **$28.20 per chip** for the 2027 to 2033 period. Dunn also cited sealed expert calculations placing the rate for 2034 to 2040 at 34.5x the current figure — or $64.86 per chip.
Arm counsel Gregg LoCascio, arguing for higher rates, let slip what Qualcomm charges for its flagship silicon: "Today it's 220, it's ten times what some of them were in 2013." That statement publicly confirmed the roughly $220 selling price of Qualcomm's Snapdragon 8-series flagship processors.
$QCOM v $ARM Some "leaks" from the closing in the bench trial today that expose how Arm is trying to screw Qualcomm on the v10 ALA (assuming my math is correct). TL;DR: - Qualcomm offered Arm $250 million cash upfront in late 2024 to lock in v10 and settle the Arm v Qualcomm lawsuit. - Arm rejected it, demanding a 15x rate hike ($28.20 per chip) through 2033 and a 34.5x hike ($64.86 per chip) through 2040. - On Qualcomm's leaked $220 Snapdragon 8 selling price, Arm is demanding a 13 to 30 percent cut of gross revenue just for the instruction set. Remember, the actual financial rate models have been heavily guarded under seal throughout this trial. But during closing arguments today, the attorneys tried to keep things properly sealed but blurted out several numbers in open court that let us do the math and piece the entire picture together. To understand the scale of what Arm is asking for, you first have to understand what Qualcomm pays today under its 2013 architecture license. Qualcomm's mobile royalty is capped at $1.88 per chip. The contract formula sets a low penny rate up to four cores, and for anything above four cores it charges 1.25 percent of the chip selling price, but with an absolute ceiling of $150. 1.25 percent of $150 equals $1.875, which rounds to the $1.88 cap. On an eight core Snapdragon phone processor, that works out to about 23 cents per core. Now look at what Arm is demanding for v10: For the first period (2027 to 2033), General Dunn stated openly in court that Arm is demanding a 15x increase over what Qualcomm currently pays. $1.88 multiplied by 15 is $28.20 per chip. For the second period (2034 to 2040), Dunn cited Dr. Kennedy's calculations from his sealed testimony showing the rate explodes to 34.5x what Qualcomm pays today. $1.88 multiplied by 34.5 is $64.86 per chip. While Arm's lead counsel Gregg LoCascio was arguing to Judge Noreika that rates need to rise because modern smartphone processors are much more expensive than they were in 2013, he had a slip of the tongue and leaked Qualcomm's actual flagship selling price in open court: "Today it's 220, it's ten times what some of them were in 2013." There is your official public confirmation that Qualcomm sells its flagship Snapdragon 8 processor for roughly $220. Now we can connect those rate increases to Qualcomm's $220 chip price and look at what that means as a percentage of gross chip revenue. - What Qualcomm pays today: $1.88 divided by $220 equals 0.85 percent of the chip selling price. - Under Arm's 15x offer (2027 to 2033): $28.20 divided by $220 equals 12.8 percent of the entire chip price. - Under Arm's 34.5x offer (2034 to 2040): $64.86 divided by $220 equals 29.5 percent of the entire chip price. To put that in perspective for silicon engineering, standard off the shelf implementation licenses for pre designed Arm Cortex cores run around 1.5 to 2.5 percent. For an architecture license, Qualcomm spends billions of dollars of its own R and D to design custom Oryon CPU cores from scratch and only uses Arm's instruction set. Yet Arm is demanding between 13 percent and nearly 30 percent of Qualcomm's gross chip revenue just for the instruction set. That explains why Dunn told Judge Noreika that Arm's mobile demand alone would require Qualcomm to pay more royalties for phone CPUs than all of Arm's licensees combined paid across all products last year. And that the rate would exceed the ASP on some of the products. To make matters even crazier, LoCascio also revealed that during settlement talks in late 2024 right before the first trial, Qualcomm actually offered to write Arm a massive check upfront. For context, Qualcomm paid $40.25 million upfront for its entire 20 year agreement back in 2013. Nuvia paid even less as a startup with a discounted upfront fee. Qualcomm offered a quarter billion dollars in cash upfront just to lock in v10 and settle the Arm v Qualcomm lawsuit. Arm rejected it because SoftBank and Rene Haas did not want a lump sum payment. They wanted the uncapped, recurring royalties that let them tax nearly 30 percent of Qualcomm's phone chips to feed Arm's internal goal of hitting $10 billion in annual licensing revenue by 2031 and forclosing Qualcomm out of the market. To me is not good faith commercial negotiation, that is an attempt to kill off custom silicon and force everyone onto standard Arm designs. And helps explain why General Dunn kept saying the evidence Noreika required was already in the case.
— John Dorbal (@JDorbal1989) October 21, 2026
The Percentage Breakdown
Using that $220 figure, Dorbal calculated what Arm's demands mean as a share of gross chip revenue:
| Period | Royalty per chip | Share of $220 chip price |
|---|---|---|
| Current (2013 ALA) | $1.88 | 0.85% |
| 2027–2033 (15x) | $28.20 | 12.8% |
| 2034–2040 (34.5x) | $64.86 | 29.5% |
For context, standard off-the-shelf implementation licenses for pre-designed Arm Cortex cores typically run around 1.5% to 2.5%. Qualcomm, by contrast, holds an architecture license and spends billions designing its custom Oryon CPU cores from scratch — using only Arm's instruction set. Arm is demanding between 13% and nearly 30% of gross chip revenue for that instruction set alone.
The $250 Million Offer Arm Rejected
LoCascio also revealed that Qualcomm offered **$250 million upfront** in late 2024 to secure v10 terms and settle the litigation — an offer Arm rejected. For comparison, Qualcomm paid just $40.25 million upfront for its original 20-year agreement in 2013.
According to Dorbal's analysis, Arm turned down the lump sum because SoftBank and CEO Rene Haas preferred uncapped, recurring royalties — a structure that would let Arm capture nearly 30% of Qualcomm's phone chip revenue and push toward its internal goal of $10 billion in annual licensing revenue by 2031.
What's Next
Arm argues the 2013 terms are outdated, with LoCascio noting that its v10 rates are partly based on what Google and Microsoft pay. Arm has also questioned whether a cap set for small phone chips should cover data center processors with 288 cores.
Judge Noreika called Qualcomm's request for court-ordered negotiations "very, very drastic" and will issue a written ruling after final submissions. The per-chip figures assume the multiples apply to the $1.88 cap; Arm's exact v10 structure remains undisclosed and may vary by product.
For a full breakdown of the trial figures, you can read John Dorbal's analysis on X here.