Qualcomm took another step Monday toward expanding its chip content in 5G devices by taking full ownership of a joint venture that makes filter, amplifier and tuner modules for smartphones.
The San Diego cellular technology provider announced that it has acquired TDK Corp. stake, valued at $1.15 billion, in the joint venture that developed radio frequency front-end chips.
Qualcomm is best known for its cellular modems that manage the connection between smartphones and network base stations. It wasn't a supplier of tiny power amplifiers, filters, multiplexers, antenna tuners, switches and envelope trackers located near antennas that refine radio signals as they enter and leave devices.
About three years ago, Qualcomm teamed up with TDK to develop these radio frequency front-end chips, competing with industry leaders such as Qorvo and Skyworks.
Radio frequency front end technology is increasingly important for new 5G networks. 5G relies on a plethora of technically difficult, higher frequency airwave bands to deliver faster speeds and greater reliability to mobile devices.
With this acquisition, Qualcomm can provide smartphone makers with an end-to-end chip package from 5G cellular modems and applications processors to radio frequency front-end chips.
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These radio frequency front-end chips also play a role in a device's battery life, as well as reception, call quality and data speeds.
The company has inked 5G supply deals for 150 devices either on the market or in the pipeline, and a vast majority of them include both Qualcomm's 5G modems and its radio frequency front -nd modules.
"Our goal in the formation of this joint venture was to enhance Qualcomm Technologies' front-end solutions to enable us to deliver a truly complete solution to the mobile device ecosystem," said Cristiano Amon, president of Qualcomm. "We are excited about the strong adoption of Qualcomm Snapdragon 5G Modem-RF Systems in virtually all of our 150-plus 5G design wins."
The total purchase price, including Qualcomm's initial investment in the joint venture and payments to TDK based on sales, will be roughly $3.1 billion.
Qualcomm's shares ended trading Monday down 23 cents at $78.18 on the Nasdaq exchange.
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