Broadcom has strengthened its role inside Apple’s hardware supply chain with a new five-year custom chip agreement that runs through 2031, easing concerns that Apple could soon replace more supplier-made components with its own chips.
TL;DR
- Broadcom will continue developing and supplying custom chips for Apple through 2031.
- The deal builds on the companies’ multibillion-dollar 2023 agreement for 5G radio frequency components.
- Apple reportedly accounts for about 20% of Broadcom’s annual revenue.
- The agreement gives Apple more supply certainty while AI demand strains global chip manufacturing.
Broadcom Extends Its Apple Chip Deal Through 2031
Broadcom said it will expand its partnership with Apple through 2031 to develop and supply custom chips, cementing its position as a key supplier to the iPhone maker.
The update gave investors a clearer signal that Apple is not moving away from Broadcom’s components in the near term, even as it continues to design more of its own processors and modem technology. Broadcom shares rose more than 3% after the announcement, while Apple shares climbed more than 1%.
Broadcom has long supplied Apple with important connectivity components, including radio frequency chips used in iPhones to connect to cellular networks, as well as Wi-Fi, Bluetooth, and other networking semiconductors.
Why Apple Still Needs Broadcom For Custom Silicon
The deal points to a practical reality for Apple’s chip strategy. Apple may be pushing deeper into in-house silicon, but complex iPhone connectivity components remain difficult to replace quickly.
Apple accounts for about 20% of Broadcom’s annual revenue, according to analysts, making the partnership strategically important for both companies.
“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,” Emarketer analyst Jacob Bourne said. “For Broadcom, it provides reassurance given that Apple has spent years trying to build these chips itself.”
This new agreement also follows the multibillion-dollar deal the two companies announced in 2023, under which Broadcom would develop and manufacture 5G radio frequency components for Apple.
Topics For More Insights
AI Chip Demand Makes Apple’s Supply Chain More Complicated
The timing matters because demand for advanced processors has intensified as AI inference workloads grow. Inference, the process where AI models respond to user queries, has pushed companies to place more orders for custom and advanced chips.
Apple relies on Taiwan’s TSMC, the world’s largest contract chipmaker, for its in-house processors, including the M-series chips used in Macs and the A-series chips used in iPhones.
However, TSMC has been stretched by rising AI chip demand from companies such as NVIDIA, which Apple CEO Tim Cook said in April had held back iPhone sales.
Apple is also reportedly in discussions with Intel to manufacture some chips in the US, though analysts believe volume production is unlikely before late 2027.
The broader memory chip crunch has already hit Apple’s product pricing. The company raised prices for MacBooks and iPads in June after memory chip costs surged as much as 98% in early 2026, driven by AI data center demand.
For Broadcom, the 2031 deal delivers long-term visibility with one of its biggest customers. For Apple, it buys time, stability, and access to specialized chipmaking expertise while the global race for AI silicon keeps tightening supply.
