Qualcomm Acquires Intel’s Smartphone Modem Business for $3.5 Billion
Qualcomm completes its purchase of Intel’s remaining smartphone modem assets, marking the end of Intel’s two-decade effort to challenge the leader in mobile connectivity. The transaction includes patents, engineering teams, and reference designs originally developed for Apple’s iPhone lineup. Intel exits the baseband market entirely after failing to ship a single 5G modem in volume despite $15 billion invested since 2009.
The deal transfers approximately 1,800 Intel engineers based primarily in Oregon, Germany, and Israel to Qualcomm’s payroll. These teams retain expertise in XMM and later-generation modem architectures that powered iPhones from 2011 through 2018. Qualcomm gains an additional 2,300 patents covering 4G and early 5G signal processing techniques, strengthening defenses against ongoing litigation from Arm and regulators.
Apple terminated its modem supply contract with Intel in 2019 after repeated delays in delivering a reliable 5G solution. The iPhone maker subsequently acquired Intel’s modem division for $1 billion that same year, yet kept a portion of the portfolio separate. Qualcomm now reclaims technology it once licensed to Intel under cross-licensing agreements dating back to 2007.
Intel’s exit leaves MediaTek and Samsung Exynos as Qualcomm’s primary competitors in the premium smartphone segment. The Santa Clara company recorded $1.1 billion in cumulative losses from its modem operations between 2017 and 2024, according to SEC filings. CEO Pat Gelsinger described the sale as enabling sharper focus on x86 CPU and foundry ambitions under the IDM 2.0 strategy.
Qualcomm paid $3.5 billion in cash, funded from its $11.3 billion cash reserve reported last quarter. The acquisition raises Qualcomm’s share of the global cellular modem market to an estimated 68% for 2026 handsets, per Counterpoint Research. Apple remains obligated to purchase Snapdragon modems through a multi-year agreement extended in 2023 and running until at least 2026.
The transaction closes less than 48 hours after U.S. District Judge Amit Mehta ruled that Google’s payments to Apple for default search status violated antitrust law. Those payments, totaling $20 billion in 2024 alone, partly offset Apple’s modem procurement costs. Qualcomm’s expanded patent pool now covers critical 5G NR sub-6 GHz and mmWave implementations across both FDD and TDD spectrum bands.
Analysts expect Qualcomm to integrate select Intel power-management circuits into future Snapdragon X-series platforms targeting Windows laptops. The deal also eliminates royalty stacking concerns that arose when Intel licensed certain technologies back to Qualcomm under the previous arrangement. Shares of Qualcomm rose 4.2% in after-hours trading following the announcement.
For U.S. carriers and device makers, the consolidation reduces supplier diversity in a component classified as critical infrastructure by the Department of Commerce. The Committee on Foreign Investment in the United States approved the transaction after confirming no national security implications from the domestic transfer. Intel retains its separate 5G network infrastructure business focused on base stations and Open RAN silicon.
This sale concludes Intel’s long retreat from mobile, beginning with the 2016 decision to wind down its Atom smartphone processor line. The company now channels resources toward reclaiming manufacturing leadership through $52 billion in CHIPS Act subsidies and contracts with Amazon, Microsoft, and the Department of Defense. Qualcomm, meanwhile, solidifies dominance in the technology that generates roughly 40% of its annual revenue.
