Apple's Self-Developed 5G Chip Sparks Competition Among Electronics Component Distributors

According to a report in the Economic Daily News, Apple has been rumored to be developing its own 5G modem chip for some time. The latest news is that both ASE Technology and Unimicron Technology are vying for the order to package the chips.

The report suggests that TSMC may produce Apple's in-house developed modem chip, but the packaging part may be handled by other suppliers. At least ASE Technology and Unimicron Technology are currently in the running. The report also notes that both companies have experience packaging modem chips for Qualcomm.

Currently, Qualcomm is the exclusive supplier of 5G modem chips for Apple. However, rumors have been circulating for some time that Apple is developing its own 5G chip. Qualcomm's CEO and President, Cristiano Amon, has stated that they expect Apple to have its own modem chip by 2024. This means that contract manufacturing for the chip may not be far off, and if it is used in related products from March next year, it could start as early as the second half of this year.

The fourth-generation iPhone SE is expected to be the first product to use Apple's in-house 5G modem chip, and the new product may be announced in March 2024. It is not yet known how Apple's in-house chip will perform compared to Qualcomm's modem chip. However, switching to its own design chip could eventually reduce Apple's production costs.

Apple began planning its own 5G modem chip when it was in a patent dispute with Qualcomm. The legal battle between Apple and Qualcomm over patent licensing fees lasted nearly two years and was settled in April 2019. At that time, the two companies also signed a multi-year chip purchase agreement and a six-year patent licensing agreement. However, even though they signed a chip purchase agreement with Qualcomm, the industry believed that Apple would still develop its own modem chip to break free from its dependence on Qualcomm. This intention became even more evident after Apple's $1 billion acquisition of Intel's smartphone modem business, which brought them a large number of patents.

Since 5G had already begun commercial use when Apple and Qualcomm settled their legal dispute in April 2019, and 5G has been in commercial use for several years, Apple has also launched a series of iPhones that support 5G for three consecutive years in the fall. Therefore, their in-house developed modem chip will also start with 5G modem chips.