Apple, Inc. AAPL will soon stop using QUALCOMM Inc.'s QCOM 5G modem chips for its iPhones, reports suggest.
What Happened: Apple will introduce its custom-designed 5G modem in its 2023 iPhone lineups, McRumors reported, citing Digitimes.
Apple will stop using Qualcomm modems in its iPhones after 2022 and all iPhone models released in 2023 and beyond will feature 5G baseband modem chips designed in-house, the report said.
The 5G modem Apple is developing will be separate from the company's A-series chips, it added.
Apple supplier Taiwan Semiconductor Mfg. Co. Ltd. TSM will reportedly supply Apple with the latter's custom-designed 5G baseband modem.
Related Link: Why This Apple Analyst Is Predicting A Record Holiday Sales Pace For iPhones Despite Chip Crunch
Apple acquired Intel Corporation's INTC modem chip business in 2019 to pursue making its own modem chip in-house.
Qualcomm said at its investor meeting this week it would meet 20% of Apple's 5G modem chip requirement in 2023.
Qualcomm's supplies could go into older or entry-level 2023 iPhone models, McRumors said. The report also suggested that Qualcomm chips could power Apple's devices made for regions where Apple 5G modems are not supported.
Why It's Important: Designing chips in-house and mass producing them is capital intensive. This will give Apple the scope of crafting its chips to match the precise requirement of its iPhones.
AAPL Price Action: Apple shares were up 2.48% at $157.34 Thursday at publication.
Related Link: Why Apple Analysts Prefer To Look Past Supply Chain Challenges, Remain Bullish After Q4 Revenue Miss
Photo: Courtesy Apple
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