Broadcom, Apple extend chip supply deal through 2031

Broadcom said on Monday it has agreed to expand its partnership with Apple through 2031 to develop and supply a range of custom chips, sending the shares of the chipmaker up nearly 4% ‌in premarket ⁠trading.

Broadcom ⁠has been a supplying key components to Apple for ​a very long time, including custom radio frequency chips used ​in iPhones, Wi-Fi and Bluetooth connectivity chips and other networking semiconductors.

Apple is one of Broadcom's ​largest customers. The iPhone maker ⁠accounts for ‌about 20% of its annual ​revenue, ​according to analysts, making it a ⁠critical contributor to the chipmaker's business.

The extended partnership ​reinforces Apple's strategy of locking in ​long-term supply agreements with key chipmakers to bolster the resilience of its supply chain.

In 2023, the companies announced a multibillion-dollar agreement for Broadcom to develop and manufacture 5G radio ‌frequency components.

The boom in inference - the process by which models respond to ​user queries - ​has made custom ⁠chips crucial, increasing the orders for advanced processors and intensifying competition.

While Apple has increasingly designed its ​own processors and, more recently, its C1 cellular modem, it continues to rely on Broadcom for key wireless connectivity and radio frequency components.