Broadcom has announced it will extend its chip partnership with Apple through 2031. This will expand the two companies' agreement to jointly develop and supply custom silicon. The news sent Broadcom shares up more than 3%, while Apple's stock rose over 1%, as investors welcomed clarity on a supply relationship that had faced growing speculation about Apple eventually going it alone.
Broadcom has been a key but rather inconspicuous part of the iPhone production chain since it offers radio frequency chips that enable iPhones to connect to cellular networks, in addition to Wi-Fi and Bluetooth chips for connectivity and other networking semiconductors. The two parties previously strengthened their collaboration in 2023 when they entered into a deal that cost several billion and covered the creation and manufacture of radio frequency 5G parts. Apple is believed to account for about 20% of Broadcom’s annual income.
The extension addresses a specific investor concern: that Apple, which has spent years working to design its own modems and processors, might eventually replace Broadcom's components with in-house alternatives. Emarketer analyst Jacob Bourne stated that the deal gives Apple supply-chain certainty during a period of chip scarcity and avoids the need to bring these particular components in-house while reassuring Broadcom after years of uncertainty over Apple's self-sufficiency ambitions.
The agreement also reflects a broader industry dynamic, where a boom in AI inference workloads has intensified competition for custom chip capacity and advanced processors across the board.
Also Read: OpenAI, NVIDIA, and Microsoft Unite to Expand AI Infrastructure
The deal lands at a tense moment for Apple's broader chip strategy. The company depends on Taiwan's TSMC for its in-house M-series and A-series processors. Still, TSMC capacity has been stretched thin by surging AI chip demand from companies like Nvidia, a constraint Apple CEO Tim Cook said had already held back iPhone sales earlier this year. Apple is separately in talks with Intel about manufacturing some chips domestically in the US, though analysts don't expect meaningful volume production before late 2027.
Memory costs have added further pressure: Apple was forced to raise MacBook and iPad prices in June after memory chip costs surged by as much as 98% in early 2026, driven largely by AI datacenter demand.
Apple's extended partnership with Broadcom reinforces long-term supply chain stability at a time of rising global chip demand. The agreement secures access to critical connectivity components, reduces supply risks, and supports Apple's future hardware roadmap as competition for advanced semiconductor capacity continues to intensify.