Broadcom announced Monday that it has reached an agreement to extend and expand its partnership with Apple through 2031, covering the development and supply of custom chips. The news sent Broadcom’s stock climbing nearly 4% in premarket trading.
The chipmaker has long been a key supplier to Apple, providing radio frequency chips that allow iPhones to connect to cellular networks, as well as Wi-Fi, Bluetooth, and other networking semiconductors.
According to analysts, Apple makes up roughly 20% of Broadcom’s yearly revenue, placing it among the chipmaker’s most important customers. Even as Apple has developed some of its own chips — including the C1 modem — it continues to depend on Broadcom for wireless and radio-frequency components.
The deal reflects Apple’s broader strategy of securing long-term supply agreements with critical chip manufacturers to strengthen its supply chain. The two companies had previously announced a multibillion-dollar agreement in 2023 for Broadcom to develop and manufacture 5G radio frequency components.
The growing demand for custom chips has been driven in part by the boom in AI inference — the process through which AI models generate responses to user questions — which has intensified competition among chip suppliers and increased orders for advanced processors.
For its in-house processors, including the M-series chips used in Mac computers and the A-series chips found in iPhones, Apple relies on Taiwan’s TSMC, the world’s largest contract chipmaker. However, TSMC has been stretched by surging demand from AI chip companies such as Nvidia — a situation Apple’s CEO noted in April had affected iPhone sales.
Apple is also reportedly in talks with Intel to produce some chips domestically, though analysts say large-scale production is unlikely to begin before late 2027.
The company was also forced to raise prices on its MacBooks and iPads in June after memory chip costs surged by as much as 98% in early 2026, a spike driven by demand from AI data centers.
