Apple in Talks to Purchase Intel's German Modem Unit

Apple is in talks to buy Intel's German modem unit, which could help Apple develop its own modem chips more quickly, reports The Information.

Intel is considering selling its modem business in pieces, and this is not the first time we've heard word that Apple's interested in a purchase. Back in April, The Wall Street Journal said that Apple had held discussions with Intel about acquiring parts of the Intel modem chip business, and apparently, those talks are ongoing.

Intel 5G Modem

Any deal between Apple and Intel would likely include Intel patents and products, said one person briefed on the discussions. Such an arrangement would resemble the deal Apple reached with Dialog Semiconductor, a U.K.-based company that designs chips that handle power management chores in devices. Last year, Apple and Dialog struck a $600 million deal that brought 300 Dialog employees to Apple, along with some patents.

The two companies have been in discussions since last year, but The Information warns that the talks could still fall through without a deal.

The Information estimates that a deal for Intel's German modem business could bring "hundreds" of modem engineers to Apple. Intel's chip production facilities are headquartered in Germany after a 2011 purchase of chip maker Infineon.

Intel announced in April that it was exiting the 5G smartphone modem business, sharing the news just hours after Apple and Qualcomm announced a resolution to their ongoing legal battle and established a new supply deal.

Apple had been planning to use Intel's 5G chips for its 2020 iPhones, but rumors indicated Intel wasn't able to meet design deadlines, causing the relationship between the two companies to sour. Apple is now planning to use Qualcomm's 5G modem chips in its 2020 5G iPhones, and is also working on its own modem chip development for later devices.

In the future, Apple is aiming to reduce its dependence on suppliers like Qualcomm by creating its own modem chips, but the company still has a few years to go before the technology is ready. According to The Information, Apple has been telling new modem chip hires in San Diego that it doesn't expect to release devices with its own modem chips until 2025.

Top Rated Comments

bsimpsen Avatar
45 months ago
I guess the point some people, including myself, is trying to make is where does it end? It was nice they made the A series chips and they were a success, but what is next? Where does it end with doing production in house?
They don't do production of A-series chips in-house. Those are fabricated by TSMC, just as the cellular chip would be. Do you think it preferable for Apple to rely on the design work of other companies, and pay them margin dollars they could keep themselves? I don't.

Apple owns the designs for the Touch ID hardware, the A-series GPUs, the NAND flash controllers, Secure Enclave, significant enhancements to the ARM CPU and much of their power management circuitry. They are a first class chip design house and that's going to be a long term differentiator for them.

Add: "People who are really serious about software should make their own hardware." - Alan Kay ('https://en.wikipedia.org/wiki/Alan_Kay') (Apple Fellow)
Score: 7 Votes (Like | Disagree)
Sasparilla Avatar
45 months ago
I believe this was speculated by some far sighted individual on these forums previously (most definitely not me).

Makes total sense, now they can take their time to get 5G nailed and kick Qualcomm to the curb when they want to (or at least keep the price down). Long term with Qualcomm getting pulled back on the monopoly legal angle - you would have thought it would make sense for Intel to hang in there and get 5G done and selling (for the long term).

I noticed that Samsung recently decided to bring the A50 mid range phones to the U.S. (wasn't doing it before). It's going to have a Samsung CPU (not the Qualcomm Sammy normally always has to put in their U.S. phones to prevent black mail by Qualcomm), perhaps because they won't have to engineer a new variant for a Qualcomm CPU? It'll be interesting if this is the start of Sammy dropping Qualcomm for CPU's (guessing the Note will still have one, but the s11 will be a good test case to wait and see on).
Score: 4 Votes (Like | Disagree)
developer13245 Avatar
45 months ago
Apple will just ship the entire business to China. Everyone is dumping 5G businesses because governments will not hold China accountable for IP theft. Good move for Intel to sell it before China steals it anyway.
Score: 4 Votes (Like | Disagree)
CWallace Avatar
45 months ago
Not much room for differentiation or deeper integration into the software stack as far as I can tell, or am I missing something? Seems foolish if the only points of differentiation are power consumption and reception quality-- Qualcomm the existing players have a huge lead on experience in those areas.
Even if Apple only reaches parity with Qualcomm, they still control the silicon which insulates them from being dependent on third-party suppliers for a critical piece of technology.


And unlike Samsung, Intel and Qualcomm, if Apple doesn't source the parts to 3rd parties they can't amortize the R&D expense across as many parts...
Apple can earn it back via the margins they make on their iOS devices. Same as they do with their CPUs, GPUs and other silicon that is unique to the iOS family.
Score: 4 Votes (Like | Disagree)
JPack Avatar
45 months ago

Makes total sense, now they can take their time to get 5G nailed and kick Qualcomm to the curb when they want to (or at least keep the price down). Long term with Qualcomm getting pulled back on the monopoly legal angle - you would have thought it would make sense for Intel to hang in there and get 5G done and selling (for the long term).
Apple expects their modem to be available in 2025, so this is more likely about staying competitive before 6G comes out.

In all likelihood, the Qualcomm decision will be reversed. Koh's decision wasn't a surprise given her background and many antitrust lawyers feel it won't stand up on appeal.
Score: 3 Votes (Like | Disagree)
konqerror Avatar
45 months ago
Hopefully modem chips won’t be laid on a ground-breaking sapphire substrate
You laugh but Apple has been using SOI chips since the original iPhone. Besides, white/blue LEDs are grown on sapphire.
Score: 3 Votes (Like | Disagree)

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