Apple is reportedly in advanced talks to acquire chipmaker Intel Corp’s smartphone-modem chip business.
The deal, valued at $1 billion or more, could be reached in the next week, a source told The Wall Street Journal.
If the transaction is completed, it would give the tech giant access to the engineering work and talent behind Intel’s work on the modem chips for 5G technology, saving Apple years of development work as it reportedly been working on its own chips. The company has already hired engineers, including some from Intel, as well as announced plans for an office in San Diego.
Last month it was revealed that Apple is planning on launching three iPhones in 2020, two of which will be 5G compatible. The phones will have 6.7-, 6.1- and 5.4-inch screens, all with organic light-emitting diode (OLED) screens. The 6.1 inch will not be 5G compatible.
The 5G support will also come with the help of modems by Qualcomm, which just settled a lawsuit with Apple. The iPhones are going to utilize Qualcomm’s 5G modem technology, with one report noting that “the content of Apple and Qualcomm’s previous settlement includes Qualcomm’s release of partly 5G baseband chip source code to Apple for Apple’s development of [its] own 5G.”
As for Intel, the deal with Apple would allow the company to rid itself of a business that has been losing about $1 billion annually. While the sale means Intel would be leaving the smartphone business, it still plans to continue to work on 5G technology for other devices.
As WSJ pointed out, Intel is just the latest Apple supplier to abandon a business after the iPhone maker began developing components in-house. Late last year, Apple acquired 300 engineers and facilities from Dialog Semiconductor PLC in a $600 million deal after the tech giant began started developing the battery-management chips Dialog had supplied.