Qualcomm secures extension to global patent licensing pact with Apple
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Semiconductor chips are seen on a printed circuit board in this illustration picture taken February 17, 2023. REUTERS/Florence Lo/Illustration
(Corrects headline to say "patent licensing" agreement, not "chip licensing;" The error also appeared in a previous version of the story)
Sept 24 (Reuters) - Qualcomm said on Thursday Apple has extended its patent-licensing agreement with the chip designer, even as the iPhone maker looks to cut its reliance on the company's modem chips.
The semiconductor company did not give a timeline for the latest move. The current agreement ends on March 31, 2027, with an option to extend it by two years. Both Apple and Qualcomm did not respond to requests for comment.
Even though the deal keeps Apple tied to some of Qualcomm's patent portfolio, the chip designer had said in July that revenue from Apple products would decline faster than expected.
Qualcomm's licensing business accounted for roughly 15% of total revenue in the June quarter. The company had said it was banking on growth in its data center business to offset the lost revenue from Apple in 2027.
In 2023, Qualcomm signed a deal with Apple to supply 5G chips until at least 2026, at a time when the iPhone maker was facing increased challenges in China and looked to shore up its supply chains elsewhere.
The partnership has been shaped by a 2019 settlement that ended a two-year global legal battle over wireless-patent royalties and modem-chip supply. They announced the truce in April 2019 as a U.S. jury trial between them was beginning in San Diego.
Under the settlement, Apple made an undisclosed payment to Qualcomm, the companies dropped litigation worldwide and agreed to a six-year global patent licensing deal from April 1, 2019.
(Reporting by Akash Sriram in Bengaluru; Editing by Arun Koyyur)
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