Qualcomm Inc.’s chief executive officer told a jury that its business suffered when customers were misled by computer-chip designer Arm Holdings Plc about the companies’ licensing agreement for chip technology vital to the electronics ecosystem.

The chief executive of Arm on Monday downplayed the company's ambitions to become a chip supplier in its own right at a trial against Qualcomm, a major customer that pays Arm an estimated hundreds of millions of dollars per year.

Arm's legal dispute with Qualcomm is being argued before a federal jury in Delaware this week, pitting two of the world's most influential chipmakers against each other in an intellectual property case that threatens to roil the technology industry.