ARM royalty rates...............................................................................................................
Need some help with understanding Arm’s rate structure provided by Prakash vs QCOMs actual payments to Arm last year ($300M) also provided by Prakash.
With the assistance of Copilot
1) Qualcomm paid approximately 0.77% of its QCT revenue to ARM in royalties last year.
..... $300M / $36B QCT revenue. ($33B FY)
2) Almost all of QCOMs SOCs last year were Arm Cortex (TLA licensed), and not the newer SOCs with Nuvia Oryon custom cores (ALA licensed - SD 8 Elite in smartphones, SD X Elite used in laptops )
Yet the rates provided by Prakash (1.1% ALA and 5.3% TLA) suggest QCOMs rate was closer to Arm’s ALA rate.
Something does not compute. QCOM’s purchase of Nuvia was to enable them to significantly lower their royalty costs by switching to ALA from TLA / to custom cores from Arm’s cortex cores.
Asked previously and unanswered – what is the base the 1.1% and 5.3% applied to?
· ALA Rate: 1.1% / $0.58
· TLA Rate: 5.3% / $2.2
Copilot Q & A >>>>>>>>>>>>>>>>>>
Per Tantra Analyst (link provided by Copilot)
Qualcomm vs. Arm trial, Day 1 – Opening statements and surprising revelations – Tantra Analyst
During the ARM vs. Qualcomm trial, it was revealed that Qualcomm was charged the following rates under the Architecture License Agreement (ALA) and the Technology License Agreement (TLA):
· ALA Rate: 1.1% / $0.58
· TLA Rate: 5.3% / $2.2
During the ARM vs. Qualcomm trial, it was revealed that Qualcomm paid approximately $300 million in royalties to ARM last year2.
Qualcomm's QCT (Qualcomm CDMA Technologies) division, which includes their chipset business, reported a revenue of approximately $39 billion for fiscal year 2024
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Qualcomm's QCT (Qualcomm CDMA Technologies) division, which includes their chipset calculate the rate in percent given $300M paid to arm vs 39B in QCT revenue
To calculate the rate in percent given $300 million paid to ARM versus $39 billion in QCT revenue, you can use the formula:
Rate=(Amount PaidTotal Revenue)×100\text{Rate} = \left( \frac{\text{Amount Paid}}{\text{Total Revenue}} \right) \times 100
So, for $300 million paid to ARM and $39 billion in QCT revenue:
Rate=(300,000,00039,000,000,000)×100˜0.77%\text{Rate} = \left( \frac{300,000,000}{39,000,000,000} \right) \times 100 \approx 0.77\%
This means that Qualcomm paid approximately 0.77% of its QCT revenue to ARM in royalties last year. |
