Qualcomm has announced that it will continue to supply 5G chips to Apple until at least 2026. This extension comes at a time when Apple is facing challenges in the Chinese market.
Qualcomm and Apple had a legal dispute in the past, but they resolved their issues in 2019 and entered into a chip supply agreement. The existing agreement was set to end this year, but the new extension will see Qualcomm continue to supply chips to Apple for another three years.
What This Means
- Apple will continue to source some of its silicon from Qualcomm, rather than relying solely on its own Apple Silicon.
- Qualcomm will supply chips for Apple’s annual phone releases until 2026.
- The terms of the deal are similar to the previous agreement.
Market Reaction
- Qualcomm’s shares surged by 4% after the announcement.
- Apple’s shares experienced a modest 0.5% increase.
Qualcomm’s market cap ($) historically:
Qualcomm’s market cap ($) historically. $QCOM #Qualcomm #QCOM #Earnings pic.twitter.com/1GEYOnSAJL
— DataDynamix (@datadynamix_) May 1, 2024
Financial Details
- The specific financial details of the deal were not disclosed.
- However, UBS analysts estimated that Qualcomm’s chip sales to Apple in 2022 amounted to $7.26 billion.
