(This May 16 story has been repeated with no changes to the text)

May 15 (Reuters) - Arm Holdings faces an antitrust probe by the U.S. Federal Trade Commission over the British chip designer's licensing of its semiconductor technology, part of global scrutiny of the business, Bloomberg News reported on Friday.

The FTC is investigating whether Arm is trying to illegally monopolize parts of the semiconductor market, the report said. It is looking to assess whether Arm will reject or downgrade the licensing agreements for its chip blueprints used to design central processing units, the report said, citing people familiar with the matter.

The U.S. regulator notified Arm of the investigation this year and demanded the company preserve documents, according to Bloomberg.

Arm declined to comment on any possible investigation. The FTC did not immediately respond to a request for comment.

Qualcomm and Arm are in a dispute over whether Qualcomm breached a contract with Arm after it bought chip startup Nuvia.

Arm said in a statement: "Qualcomm's baseless allegation of anticompetitive conduct is nothing more than a desperate and underhanded attempt to obtain leverage in the parties' ongoing commercial dispute for its own competitive benefit."

Qualcomm did not immediately respond to a request for comment.

A big portion of Arm's revenue comes from licensing its technology to companies such as Nvidia and Apple and collecting royalty payments on design use.

Regulators outside the U.S. are also probing Arm's practices. 

South Korea's antitrust regulator was investigating the Seoul offices of Arm in November, as part of ongoing scrutiny of the company's licensing practices. Bloomberg reported that the South Korean investigation stemmed from a complaint from Qualcomm, but Reuters could not verify that claim.