Broadcom has extended its long-standing partnership with Apple by five years. Thanks to new multi-year agreements, the chip manufacturer will remain responsible for the development and supply of various custom chips for future generations of Apple devices through 2031. The stock market reacted positively to the news.
Broadcom announced the extension in an official stock exchange filing. According to the company, the new contracts involve the development and supply of various custom ASICs (Application-Specific Integrated Circuits) that will be used in multiple future generations of Apple products. Financial details were not disclosed.
For Broadcom, the agreement is of great strategic value, according to The Next Web. Analysts estimate that Apple accounts for about one-fifth of the chipmaker’s annual revenue. By securing the partnership for multiple years, Broadcom gains greater certainty regarding future revenue in a market where long-term contracts are scarce.
For Apple, the extension is primarily about supply chain continuity. Since the global chip shortages during the COVID-19 pandemic, the company has been trying to secure longer-term commitments from critical suppliers. In doing so, Apple aims to limit production disruptions and ensure the availability of key components.
The new agreement builds on a previous multi-billion deal from 2023. At that time, both companies agreed that Broadcom would develop and manufacture 5G radio frequency components for Apple in the United States. The contracts announced now build on that long-term relationship.
In-house chips will take longer to materialize
The duration of the agreement also fuels speculation about Apple’s in-house chip development. The company has been working for years on internal solutions for wireless connectivity to reduce its reliance on external suppliers. The fact that Broadcom will remain on board until 2031 may indicate that this transition is taking longer than initially expected.
Broadcom has been supplying various communication chips to Apple for years, including components for mobile connections, Wi-Fi, and Bluetooth. Although Apple is designing more and more of its own silicon, such network chips will continue to come largely from specialized suppliers for the time being.
The extension is part of a broader trend in which major technology companies are increasingly opting for custom chips. Cloud providers are developing their own AI accelerators, and other major players are also investing in processors specifically designed for their own applications, rather than off-the-shelf chips from third parties.
For Broadcom, this market represents an increasingly important growth driver. In addition to network chips, the company also develops custom AI processors for major cloud companies. The extension of its partnership with Apple underscores its position as a supplier of specialized chips to some of the world’s largest technology companies.
In the short term, the agreement will not change Apple’s product roadmap. The chips covered by the new contracts will be gradually integrated into new generations of iPhones and other Apple devices over the coming years, without end users noticing any immediate changes. The agreement’s greatest significance, therefore, lies in the strategic certainty that both companies provide each other.