Intel Apple Agreement

Apple`s move would be a symbolic blow to Intel, especially when civilian and military officials are worried about weakening U.S. leadership in chip manufacturing, which they see as crucial to the country`s ability to stay one step ahead of China. Laws introduced last week in Congress with a rare bipartisan deal would guide tens of billions of dollars to bolster U.S. semiconductor research and manufacturing. Intel announced today that it has completed the sale of most of its smartphone modem business to Apple for $US 1 billion, following government approval. The transaction was first announced in July and includes intellectual property, equipment and approximately 2200 Intel employees joining Apple. As part of the deal, some 2,200 engineers will move from Intel to Apple, including most of Intel`s modem business. The Wall Street Journal reported Monday that the two were in “advanced talks.” A deal would involve both intellectual property and personnel as part of Intel`s efforts to design and build the capital smartphone component, which ultimately landed only Apple as a customer. The reported purchase price, which is under discussion, is about $1 billion. Other big tech companies, like Amazon and Google, are already developing some of their own chips, both for performance reasons and for possible cost reasons. Some tasks, such as artificial intelligence and 3D image rendering, can be accomplished more efficiently on special circuits than the versatile microprocessors that are Intel`s main support. The acquisition will also reduce Apple`s reliance on Qualcomm, the dominant supplier of smartphone modems.