Apple has made major advances in delivering its chips for its smartphones, acquiring Intel’s modem division in a $ 1 billion deal, the two companies announced on Thursday. Under the agreement, approximately 2,200 Intel employees will join Apple, along with equipment and intellectual property rights.
Combined with the existing portfolio, Apple will have 17,000 patents in wireless technology, becoming a top 5G patent holder along with companies like Huawei Technologies Co. Ltd.
After announcing the deal, Intel shares rose 5.7% to $ 55.05 on the New York Stock Exchange, while Apple’s stock grew slightly by 0.1% to $ 207.29.
The transaction, which is expected to be completed by the end of the year, will help Apple achieve its smartphone modem chips and compete better with Samsung Electronics and Huawei rivals.
Intel announced that it will sell the 5G modem chip division in April after the legal dispute between Apple and Qualcomm, a key supplier of modem chips used in the iPhone. Apple is among the companies interested in the Intel division, analysts said.
In 2018, the European Commission imposed a fine of 997 million euros on Qualcomm because of the abusive behavior of the US firm, which has paid large sums of money to its Apple customer for failing to source faces from Qualcomm rivals.