Apple Inc. today said it’s planning to hire 1,200 additional employees over the next three years to work at a planned new facility in San Diego, which is not coincidentally the home base of one of its main legal rivals, Qualcomm Technologies Inc.

The move follows an earlier announcement from Apple in December that it would hire 1,000 extra staff in the city as part of a much bigger U.S. expansion plan.

Apple is now upping that pledge by 200 more, reports said. San Diego will therefore become a critical hub of Apple’s engineering talent, with available positions spanning hardware and software development.

Last month, it was reported by Reuters that Apple had moved its modem chip engineering team into its hardware technology unit, from its supply chain group. The implication is that it could be looking to build components internally that it used to buy from modem chip leader Qualcomm, that report said. Further evidence of this comes from Apple’s recent job postings in San Diego that relate to the design of cellular modems and integrated application processors, according to EE Times.

The iPhone maker’s expansion plans come amid an ongoing legal dispute between the two companies, with Apple alleging that Qualcomm has been unfairly charging it for royalties in order to use its chips in its devices. For its part, Qualcomm contends that Apple has actually violated its patents. Apple has since stopped using modems from Qualcomm for its newest iPhones, switching to chips made by Intel Corp. instead.

Apple’s decision to drop Qualcomm could well come back to bite it, however. The iPhone maker is said to be struggling to add 5G capabilities to its devices for lack of suitable modems. As a result, analysts say the company may be forced to wait until late 2020 before it can ship its first 5G-capable iPhones.

It hasn’t been confirmed where the new employees will be based, but 10News reported that Apple is considering a facility south of Qualcomm’s main campus. The facility is expected to open later this year with an initial staff of 200, the report said.

“Apple has been a part of San Diego for nearly 20 years through our retail presence and small, fast-growing teams – and with this new investment, we are proud to play an even greater part in the city’s future,” said Apple Chief Executive Office Tim Cook in a statement. “You don’t have to try too hard to convince people that San Diego is a great place to live, work and do business, and we’re confident our employees will have a great home among the community there.”

Holger Mueller, principal analyst and vice president of Constellation Research Inc., told SiliconANGLE that Apple’s expansion into San Diego was smart for several reasons. First, it makes it easier for the company to poach employees from Qualcomm, and second, it provides family-oriented employees with an escape outlet from the overpriced Silicon Valley area.

Not least, the city boasts a number of excellent universities such as the University of California at San Diego, the University of San Diego and San Diego State University, which churn out 50,000 graduates a year, he said.

“San Diego offers a lower cost of living, often has better public schools than the Bay Area and certainly better weather,” he added.

Apple’s growing presence in San Diego is part of a much wider expansion across the U.S. The company is also planning to build a new $1 billion campus in Austin, Texas, together with new offices in Seattle and in Culver City in Southern California.

The company has said it will create 20,000 new jobs in the U.S. by 2023.

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