Each 12-inch wafer that TSMC ships to Qualcomm can yield 2,211 modem chips for Apple; with 80,000 wafers shipped, we can estimate that Apple received 176 million 5G modem chips. This tells us that Apple expects to deliver 176 million 5G handsets this year. You might recall that Apple and Qualcomm were the Silicon Valley equivalent of the Hatfields and McCoys in 2019 with both firms taking each other to court for various patent infringements. Apple was frantically trying to find a source for 5G modem chips. On April 16th, 2019, just after Apple concluded its opening statement in a court battle with Qualcomm, a settlement between the two companies was announced. In return for a large sack of cash from Apple (estimated to be $4.5 billion), the chip designer gave Apple a six-year licensing agreement with an option for an additional two years. The settlement also included a supply agreement that covers the purchase by Apple of Qualcomm’s 5G modem chips. All legal action filed by both companies against the other was dropped.
Apple does not ever want to be in the position again where it needs a specific component from a third-party supplier. So it has been working on developing its own modem chip. This would be dome similar to how Apple designs its own chipsets and has it built by a contract foundry such as TSMC or Samsung. Last year, Apple spent $1 billion to acquire most of Intel’s smartphone modem chip business. 2,200 Intel employees joined Apple with the transaction. Apple hopes to start using its own 5G modem chips perhaps by 2023. This could save Apple some money which in turn might allow the firm to cut pricing on future 5G enabled devices.
Source: Phonearena
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