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Qualcomm Adds Another New Chip Aimed at Pushing 5G Adoption

Ian King

(Bloomberg) -- Qualcomm Inc. announced its third new chip for 5G smartphones that the company said will help cellular service providers and deliver another improvement in mobile phone performance.The X60 is the chipmaker’s latest modem for the fifth-generation networks that debuted only last year and will become the mainstream service this year. The company said phones based on the new chip will go on sale in 2021. A modem is a type of chip that turns radio signals into voice and data.The part will allow a step forward in what’s called carrier aggregation, according to San Diego-based Qualcomm. That means phones will use a combination of the new higher frequencies that make up 5G and the airwaves relied on by older networks. Data will be sent to and from phones much quicker than using one narrower piece of spectrum.Phone companies, which typically own the rights to use scattered batches of airwaves, will be able to get more efficiency out of their expensive assets. That should help persuade the carriers, who are key in the rollout of 5G, that it’s in their interests to speed up introduction of the new service, according to Qualcomm.

Qualcomm’s chip revenue has reflected the surge and the maturing of the smartphone industry. The company’s semiconductor sales peaked in fiscal year 2014 at more than $18.6 billion. In the last few years as consumers have held onto their phones longer, revenue has declined to $14.6 billion.

The chip will also be the first to be made with 5-nanometer technology, the most advanced production technique in the semiconductor industry. Qualcomm outsources its manufacturing to companies such as Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co.Qualcomm was among the biggest beneficiaries of the shifts to previous generations of mobile phone technology, when its chips became the market leader. In the decade since 4G began, smartphone sales have slowed given incremental improvements in form and function. That has hurt Qualcomm’s growth as the company is facing more competition, including from customers such as Samsung and Huawei Technologies Co.

To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.net

To contact the editors responsible for this story: Alistair Barr at abarr18@bloomberg.net, Andrew Pollack, Dan Reichl

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