The five-year extension reinforces Broadcom’s role as a key supplier of custom chips for Apple, easing concerns over potential in-house replacement of critical components.
Broadcom has extended its partnership with Apple through 2031 to develop and supply custom chips, strengthening its position as a key supplier to the iPhone maker and easing investor concerns over Apple‘s efforts to design more components in-house.
According to Reuters, the agreement widens the companies’ existing relationship, under which Broadcom supplies custom radio frequency chips used for cellular connectivity, Wi-Fi, Bluetooth and other networking functions in Apple devices. The two companies had earlier signed a multibillion-dollar agreement in 2023 to develop and manufacture 5G radio frequency components.
The announcement lifted Broadcom shares by more than 3%, while Apple shares gained over 1%. Analysts estimate Apple contributes roughly 20% of Broadcom‘s annual revenue, making the long-term extension strategically important for both companies.
“For Apple, locking in Broadcom through 2031 buys supply-chain certainty at a moment of chip scarcity,” said Emarketer analyst Jacob Bourne. “For Broadcom, it provides reassurance given that Apple has spent years trying to build these chips itself.”
The agreement comes as demand for custom silicon continues to increase, driven by advances in artificial intelligence. While Apple increasingly designs its own processors, it still relies on specialist suppliers such as Broadcom for complex connectivity chips. According to Reuters, Apple is also exploring U.S.-based chip production with Intel, although analysts expect commercial-scale manufacturing to remain several years away.
