Qualcomm (QCOM:US), a leading provider of modem chips connecting phones to mobile data networks, has inked a new agreement with Apple (AAPL:US) to supply 5G chips for the iPhone manufacturer until at least 2026.
This news saw Qualcomm shares gain 3% in early Monday trade.
This partnership follows a prior supply agreement signed in 2019, which marked a resolution to a long-standing legal dispute between the two companies. The existing chip supply arrangement is set to conclude this year, making the upcoming iPhone release the final one covered by that deal.
“This agreement reinforces Qualcomm’s track record of sustained leadership across 5G technologies and products,” the company said in a press release.
Under the newly announced agreement, Qualcomm will continue to provide Apple with chips for their annual phone releases until 2026. While specific financial details were not disclosed, Qualcomm noted that the terms are "similar" to the previous arrangement.
In addition to chip supply, the two tech giants have maintained a patent licensing deal since 2019, set to expire in 2025. However, there is an option for a two-year extension.
Qualcomm shares are still down about 1% year-to-date.
Qualcomm shares were exchanging hands below $110 apiece on Monday.