Broadcom and Apple extend chip supply partnership through 2031; Broadcom stock rises 4% on custom ASIC deal for multiple Apple product generations

Broadcom Inc. and Apple Inc. have solidified their partnership by extending their chip supply agreement through 2031, which includes the development of custom ASIC silicon products for various Apple devices.¹²⁵⁶

This extension is crucial for Broadcom, as Apple accounts for approximately 20% of its annual revenue, providing a stable revenue stream amid ongoing chip shortages.⁷⁸

The deal alleviates investor concerns regarding Apple's potential shift to in-house chip production, reaffirming Broadcom's importance in Apple's supply chain.

Analyst Jacob Bourne noted, "For Apple, locking in Broadcom through 2031 buys supply-chain certainty at a moment of chip scarcity, and spares Apple from having to in-source key iPhone components."

The partnership also encompasses the development of chips for Apple's AI infrastructure, indicating a broader collaboration beyond traditional components.

In 2023, the companies had already entered a multibillion-dollar agreement for 5G radio frequency components, further solidifying their relationship.

Broadcom's stock has seen a significant increase, rising 4% following the announcement, while Apple shares also experienced a slight uptick.³⁴

The agreement not only secures Broadcom's position as a critical supplier but also aligns with Apple's strategy of establishing long-term contracts with key chip manufacturers to enhance supply chain resilience.

Overall, this partnership underscores the ongoing reliance of both companies on each other as they navigate the evolving technology landscape.