Apple and Qualcomm have agreed to extend their chip supply deal until at least 2026.
The deal is worth billions of dollars to Qualcomm and will see the company continue to supply 5G chips to Apple for its iPhones and other devices.
Following the announcement, Qualcomm’s shares surged by 4% during early afternoon trade. Apple’s shares also registered a 0.5% increase.
The extension of the deal comes at a time when Apple is facing increased challenges in China, its second-largest market where it has been criticized for alleged monopolistic practices. Apple has also been caught up in the country’s crackdown on technology companies.
Under the deal, Qualcomm will be the exclusive chip supplier for Apple’s phones until 2026, with precise financial details remaining undisclosed but deemed “similar” to the previous arrangement.
The deal with Qualcomm is a way for Apple to secure a reliable source of chips at a time when the global chip shortage is causing supply chain disruptions. It also gives Apple more time to develop its own modem chips, which are used to connect devices to cellular networks.
The sources for this piece include an article in Reuters.