Qualcomm signs new deal to supply Apple with 5G chips until 2026

Qualcomm has signed a deal with Apple to supply 5G chips until at least 2026. This comes at a time when the iPhone maker faces increased challenges in China and looks to reinforce its supply chains elsewhere.

The deal extends a relationship worth billions of dollars to Qualcomm for at least three years beyond. This also indicates that Apple is not rushing out its own modem, despite moving all its computers to processing chips of its own design. 

Shares of Qualcomm that is the leading designer of modem chips that connect phones to mobile data networks, were up 4% in early afternoon trade. Apple shares rose 0.5%. 

San Diego, California-based Qualcomm previously signed a chip supply deal with Apple in 2019, after the two companies settled a protracted legal battle. That supply agreement ends this year, meaning that the iPhones that Apple is expected to announce on Tuesday would be the last phone debut under that deal.

Under the new accord announced, Qualcomm said it will supply Apple with chips for phones that will come out each year until 2026. Qualcomm did not disclose the value of the deal, saying only that the terms are "similar" to its previous agreement.