A new agreement between Broadcom and Apple meant that both firms could accomplish their individual goals without being adversely affected by external forces. With the latest partnership, Apple will be receiving chip supply until 2031.
The deal was absolutely necessary for Broadcom, as Apple accounts for 20 percent of the chipmaker’s annual revenue
Ditching Qualcomm and entering the custom 5G modem market enabled Apple to introduce the C1 and C1X, but that doesn’t mean the story ends here. These baseband chips still require wireless and RF components to operate cellular, Wi-Fi, and Bluetooth connectivity on devices, which is where Broadcom comes into play.
For the chipmaker, inking a multi-year deal with Apple meant financial stability, as Reuters reports that the iPhone maker accounts for 20 percent of its new partner’s annual revenue. For Apple, the partnership gives the Cupertino firm some breathing room in obtaining a healthy chip supply for several years.
As mentioned above, the AI boom has increased demand for custom chips, and with TSMC’s supply running thin due to the proliferation of orders from the likes of NVIDIA, Apple wants to diversify its business relationships with other companies to minimize risk, which explains its insistence on bringing Chinese memory maker CXMT into the fold.
Intel becoming Apple’s foundry partner isn’t off the cards either, with the possibility that the company’s M7 is mass produced on the 18A-P process. There was also a rumor doing the rounds, stating that Intel’s 18A node will be leveraged for the iPhone 18’s A20, but those claims were almost immediately nullified.
Apple won’t need Broadcom forever
If the California-based giant has inked this deal Broadcom, it’s due to sheer necessity. As mentioned above, having one customer account for 20 percent of annual revenue isn’t an ideal scenario, especially when Apple has plans to reduce dependency on Broadcom.
The technology titan has been reported to be developing an “all in one” solution that houses cellular, Wi-Fi, and Bluetooth connectivity in a single package. With the C1 and C1X 5G modems already out in the open, with the C2 soon to follow, Broadcom is running on borrowed time, but since Apple’s deal will last for five years, it has plenty of time to branch out.
News Source: Reuters
About the author: Omar Sohail is a reporter and analyst for Wccftech's mobile section, specializing in the technology and business of the mobile industry. His expertise lies in the intricate hardware supply chain, covering developments in semiconductor manufacturing, chip lithography, and camera sensor technology.
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