Qualcomm Inc. announced it has renewed its worldwide licensing agreement with Apple Inc., taking effect in April 2027.

Shares of Qualcomm trimmed some losses on the news.

The company, which ranks as the biggest manufacturer of smartphone processors, earns licensing fees from handset producers based on shipment volumes. "We are pleased to extend the Apple license agreement," stated John Han, the Qualcomm executive vice president overseeing licensing.

Qualcomm has been pressured more than anticipated by a downturn in the smartphone market. The company, which contracts out the manufacturing of its chips, said it is transferring some of its rising costs to customers. This will assist profit margins in recovering over time, it said. Memory-chip shortages — driven by surging demand for AI computers — have compelled Qualcomm customers including Apple to manufacture fewer phones.

Shares of Qualcomm and Apple showed minimal movement in premarket trading in New York.