South Korea Probes Arm Holdings Licensing After Qualcomm Complaint

South Korea's Fair Trade Commission visits Arm Holdings' Seoul office as part of an investigation into the chip design company's licensing practices, sources told Reuters. The action follows a formal complaint from Qualcomm that alleges Arm's licensing terms restrict competition and access to critical intellectual property, according to the report.

The regulator's presence in Seoul underscores the growing attention by national authorities to the licensing arrangements of companies that control foundational technology. Arm's instruction set architecture and reference designs are embedded in processors used by a wide range of vendors, from smartphone makers to cloud and AI hardware developers. Any regulatory finding that changes how Arm licenses its technology could affect competitors, customers and the pace of innovation across multiple sectors.

Arm and Qualcomm did not respond immediately to requests for comment and the regulator declined to comment, the report said. The complaint lodged by Qualcomm places a major licensor at the center of antitrust scrutiny in a country that hosts key semiconductor companies and supply chain hubs. South Korea's inquiry is likely to examine whether Arm's contractual terms and licensing structure unfairly limit rivals or hinder access for downstream manufacturers.

Industry lawyers and analysts say that licensing disputes involving core technologies can lead to remedies ranging from fines to changes in contractual terms or compulsory licensing. For an architecture as widely used as Arm's, such measures could reshape competitive relationships among chip designers and original equipment manufacturers. For companies that design bespoke chips or adapt Arm designs for performance and energy efficiency, changes to licensing could alter costs, timelines and strategic road maps.

The probe also comes at a moment of intense demand for specialized processors driven by artificial intelligence workloads. Many new AI accelerators and edge devices rely on Arm compatible designs for power efficiency and integration with existing ecosystems. Regulators will be weighing not only competition law concerns but also the broader implications for technology diffusion and supply chain resilience.

South Korea is not the only jurisdiction closely watching dominant technology providers, and the move highlights the global nature of regulatory risk for companies that steward widely adopted standards. For Qualcomm, the complaint reflects its commercial and strategic interests as a major chip designer and licensee. For Arm, which licenses its architectures to a broad customer base, the scrutiny raises questions about how licensing models balance control of intellectual property with the need to foster competitive markets.

What follows is likely to be a period of document review and formal engagement between the regulator and involved parties. Outcomes could range from dismissal of the complaint to negotiated commitments or enforcement actions that would have industry wide consequences. In the near term, market participants and policymakers will be watching closely for any signals about how antitrust authorities will treat licensing practices at the core of the semiconductor industry.