Broadcom announced it will expand its long-standing partnership with Apple through 2031, securing a deal to develop and supply a new generation of custom chips for the iPhone maker.
The agreement, disclosed via an SEC Form 8-K filing on July 6, 2026, locks in Broadcom as a critical silicon partner for nearly another decade and sent Broadcom shares up more than 3 per cent on the news, while Apple’s stock rose over per cent .
The expanded partnership directly addresses a persistent question that has shadowed Broadcom investors: whether Apple might eventually replace Broadcom’s components with internally designed chips.
For years, Apple has been steadily bringing chip design in-house — a strategy embodied by its M-series processors for Macs and A-series chips for iPhones, as well as its much-anticipated effort to develop its own cellular modem. That trajectory fueled speculation that Broadcom’s radio frequency and connectivity components could be next on the chopping block.
This deal puts those fears to rest, at least through the end of the decade. By formalising new multi-year agreements covering custom ASIC (application-specific integrated circuit) silicon across multiple generations of Apple products, the two companies have signaled that Broadcom’s expertise in complex custom silicon remains indispensable to Apple’s roadmap.
What Broadcom brings to the table
Broadcom has long been one of Apple’s most important component suppliers. Its contributions include radio frequency (RF) chips that enable iPhones to connect to cellular networks, Wi-Fi and Bluetooth connectivity chips, and a range of other networking semiconductors that underpin the wireless experience across Apple’s ecosystem.
These are not off-the-shelf parts — they are highly customised designs co-developed by engineering teams at both companies, refined over years of collaboration.
The new agreement expands this scope further, with Broadcom set to provide custom ASIC chips that will be integrated into various Apple devices. While neither company has disclosed the precise applications, the breadth of the deal suggests a deepening technical relationship that spans more of Apple’s hardware portfolio than before.
Apple accounts for roughly 20 per cent of Broadcom’s annual revenue, according to analyst estimates, making the iPhone maker one of the chip company’s largest single customers. The 2023 multibillion-dollar agreement for 5G radio frequency components already underscored the scale of this dependency in one direction — and this latest extension reinforces it in both.
The broader semiconductor landscape
The timing of the deal is telling. The artificial intelligence boom has reshaped the semiconductor industry, with the surge in inference workloads — the process by which trained AI models respond to user queries — driving an insatiable appetite for advanced processors. This has strained the global chip supply chain and intensified competition for manufacturing capacity at the world’s leading foundries.
Apple itself has felt the squeeze. TSMC, the Taiwanese contract chipmaker that fabricates Apple’s in-house M-series and A-series processors, has been stretched thin by surging demand from AI chipmakers like Nvidia.
In April, Apple CEO Tim Cook acknowledged that these supply constraints had held back iPhone sales, illustrating how the AI gold rush has created downstream effects even for companies not directly in the AI chip business.
Apple has explored diversifying its chip manufacturing base, including discussions with Intel to produce some chips in the United States. But analysts caution that volume production through Intel is unlikely before late 2027, leaving Apple with limited near-term options for reducing its foundry dependency.
The supply crunch has also hit Apple’s costs. In June 2026, the company was forced to raise prices on its MacBooks and iPads after memory chip costs surged as much as 98 per cent in early 2026, driven by AI data centre demand that has vacuumed up available supply across multiple semiconductor categories.
Beneath the surface of this deal lies a broader industry shift. As AI moves from training to deployment, custom silicon — chips purpose-built for specific workloads rather than general-purpose computing — has become increasingly valuable. Companies that can design and manufacture these specialized processors hold a growing competitive advantage.
Broadcom has positioned itself as a leader in this custom ASIC market, and the Apple partnership validates that strategy. By securing Broadcom’s custom chip capabilities through 2031, Apple ensures access to tailored silicon even as it continues developing its own processor designs in parallel.
The two approaches — in-house processors for core compute, Broadcom’s custom chips for connectivity and specialised functions — are complementary rather than competitive, and the extended deal formalises that symbiosis for years to come.
