Broadcom extends Apple partnership, to supply new custom chips through 2031

US chipmaker Broadcom said it will supply Apple with new custom chips under a partnership agreement extended through 2031.

Under the new deal, the two companies will collaborate on application-specific integrated circuits, or ASICs, with the chips set to be used across "multiple generations of Apple products," Broadcom said Monday, according to Bloomberg.

Broadcom has long supplied Apple with components for cellular networking, Wi-Fi and Bluetooth. Bloomberg reported that the extended agreement comes as Apple developed its own "NI" chip — an integrated Wi-Fi and Bluetooth component for the iPhone, iPad and Mac — and as speculation grew that Apple's work on its first dedicated AI server chip would lead it to replace Broadcom parts.

Reuters reported that the long-term contract shows that despite Apple's efforts to develop its own modems and processors, it still needs Broadcom for complex custom chips.

Apple accounts for roughly 20 percent of Broadcom's annual sales.

Jacob Bourne, an analyst at eMarketer, said the extension gives Apple supply chain stability in an era of chip shortages and eases the pressure to manufacture key iPhone components in-house. "Given that Apple has been working for years to develop these chips on its own, this contract renewal is reassuring news for Broadcom," he added.

Broadcom signed a multibillion-dollar deal with Apple in 2023 to develop and supply 5G radio frequency components.

Apple is in talks with Intel about producing some chips in the United States, though analysts say mass production is unlikely before late 2027. Apple raised prices on MacBook and iPad models last month after memory chip prices surged as much as 98 percent amid soaring demand for AI data centers.

Broadcom's share price climbed more than 3 percent on the news of the partnership extension. Apple rose more than 1 percent.