The two companies signed new multi-year agreements for Broadcom to develop and supply custom ASIC chips across multiple generations of Apple products
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Broadcom $AVGO and Apple $AAPL agreed to expand their chip supply partnership through 2031, with Broadcom developing and supplying a range of custom ASIC silicon products for use across multiple generations of Apple products, the company said Monday.
Terms of the deal were not disclosed. The companies had previously extended a multiyear, multibillion-dollar agreement in 2023, according to MarketWatch.
Among the components Broadcom has long provided to Apple are custom radio frequency chips for cellular connectivity in iPhones, along with semiconductors handling Wi-Fi, Bluetooth, and other networking functions, according to Reuters. At approximately 20% of Broadcom's total annual revenue, Apple ranks among the chipmaker's biggest clients, according to Reuters.
Even as Apple has brought modem development in-house — its C1 chip debuted in the iPhone 16E — the company has not been able to move away from Broadcom for wireless and radio frequency components, according to Reuters. A full in-house takeover of cellular modem technology appears unlikely to arrive until at least 2031, the length of the new agreement implies, according to 9to5Mac.
The partnership also extends to Apple's AI infrastructure. Broadcom technology is being incorporated into Apple's in-development AI server chips — internally codenamed Baltra — which are targeted for rollout as early as next year, according to Bloomberg. The chips' purpose is to support the cloud computing infrastructure that runs Apple Intelligence, Bloomberg reported.
Broadcom stock rose about 4% to 5% in premarket trading following the announcement. Shares are up more than 30% over the past twelve months.
The deal comes as Apple has faced rising chip costs. Soaring memory chip prices — up as much as 98% in early 2026 on the back of AI datacenter demand — pushed Apple to increase what it charges for MacBooks and iPads in June.
Broadcom has been expanding its custom chip partnerships across the technology industry. As Quartz reported on the company's second-quarter earnings, Broadcom CEO Hock Tan said the company has six core custom chip customers, including Google $GOOGL, Meta $META, Anthropic, and OpenAI, and reiterated guidance for AI semiconductor revenue to exceed $100 billion for the full fiscal year.
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