Apple is a top manufacturer in the industry and such brands usually have their self-developed chips. However, before the launch of its first 5G iPhone (iPhone 12), the company 5G modem was not quite ready. According to a recent report, Apple will use its own 5G modem on its iPhones by 2023. Nevertheless, the company will not integrate the 5G modem into the A-series chip but will use an independent design.
If the news is accurate, this means that the 2022 iPhones will be the last generation of iPhones with Qualcomm’s 5G chip. Starting from 2023, the iPhone will use Apple’s self-developed 5G modem chip. At that time, the iPhones will be using the A17 Bionic chip.
At present, TSMC is responsible for all self-developed chips of Apple, and TSMC will also be responsible for future 5G chip orders. Of course, for Apple, the 5G modem may be easy to design but it is difficult to test. This is because it has to repeatedly test the performance of its own baseband together with global operators. This is not only time-consuming but also requires a huge amount of engineering.
As a result of these reports, Apple closed up 2.85% to $157.870, and its single-day market value rose by nearly $71.9 billion, with a total market value of $2.6 trillion. This takes the company back to the number one spot in the world.
Qualcomm expects only 20% of Apple’s 5G modem orders from 2023
Qualcomm and Apple had a long and “nasty” legal battle before both companies eventually resolved. The former has been supplying the latter with 5G modems that it has used for its two generations of 5G iPhones. However, Qualcomm is now preparing for life after Apple because Apple will launch its own modem chips soon. According to reports, Apple’s modem chips will decimate Qualcomm’s modem business from 2023.
Yesterday, there was an Investor Day event where Qualcomm CFO, Akash Palkhiwala, revealed that in 2023, Qualcomm will lose 80% of modem chips it supplies to Qualcomm. This means that Qualcomm expects to supply just 20% of Apple’s modem chips. Considering this report, Qualcomm has just next year to supply 5G modem chips to Apple. For the iPhone 12 series and iPhone 13 series, Qualcomm has enjoyed a modem monopoly. Qualcomm said
“The assumption we use for this forecast is that for Apple 2023 launch, our share is down to 20%. This is a planning assumption for the forecast purposes. Just to be clear, there is no new data point that makes us do this forecast versus our discussions in the past. We just wanted to set a base for this forecast, and so we’ve used that as a planning assumption”.