Broadcom Inc. has secured a major long-term extension to supply custom semiconductors to Apple Inc. through 2031, the company announced Monday.
The expanded partnership leans heavily on application-specific integrated circuits (ASICs) designed to power Apple’s growing artificial intelligence (AI) infrastructure, effectively easing Wall Street concerns regarding the iPhone maker’s efforts to phase out third-party silicon.
Broadcom shares jumped more than 5% in New York trading following the announcement, continuing a year of strong gains fueled by the AI boom.
Apple represents roughly 20% of Broadcom’s annual revenue, making it the chipmaker’s largest and most critical customer. The iPhone maker has aggressively pushed to develop in-house alternatives — recently rolling out its own proprietary Wi-Fi and Bluetooth chips and the C1 modem — but the new agreement solidifies Broadcom’s footprint in Apple’s hardware ecosystem for nearly another decade.
Industry analysts view the deal as a major win for Broadcom, guaranteeing a steady, high-margin revenue stream from the world’s most demanding consumer tech company. The partnership reinforces Apple’s broader strategy of locking in multi-year agreements to shield its supply chain from global volatility.
“For Broadcom, it’s a five-year annuity from the world’s most demanding customer, stacked on top of the hyperscaler XPU ramp,” said Daniel Newman, CEO of The Futurum Group. “Broadcom wins either way the AI cycle breaks.”
Broadcom will develop specialized ASIC silicon to be used across multiple generations of Apple products, according to regulatory filings. Crucially, the technology is expected to be integrated into Apple’s upcoming dedicated AI server chips, codenamed Baltra.
Scheduled for deployment by next year, these specialized servers will power cloud-based Apple Intelligence features, which handle complex tasks like advanced text and image generation, as well as data summarization. By collaborating on custom ASICs, Apple can optimize its data centers specifically for these heavy inference workloads.
“For Broadcom, securing this multi-year commitment from a client that drives roughly 20% of its annual revenue establishes a predictable financial floor, giving it the stability needed to fund its own AI accelerator programs for hyperscalers,” said Ron Westfall, an analyst at HyperFRAME Research. “From my viewpoint, this collaboration assures Apple the critical hardware stability and advanced custom infrastructure necessary to scale its Apple Intelligence and server ecosystems over the next half-decade amidst an increasingly strained global supply chain.”
“I see the extension of the Apple alliance giving Broadcom a competitive edge against rivals, such as Marvell, Qualcomm, and NVIDIA in data center infrastructure and wireless connectivity, by securing a multibillion-dollar revenue guarantee through 2031, providing the long-term financial predictability needed to fund R&D and potentially out-innovate its rivals in custom AI accelerators,” Westfall added. “Moreover, the extension gives Apple a competitive boost in the hardware and consumer AI space, including against rivals Samsung (with Galaxy AI) & Google (with Gemini Intelligence), by locking down a long-term supply chain of RF & custom networking silicon, ensuring its localized Apple Intelligence and Private Cloud Compute ecosystems can scale reliably across future device generations without supply chain uncertainties.”
The deal arrives at a time of explosive growth for Broadcom.
The company’s Q2 FY2026 financial report revealed a 48% year-over-year revenue surge to $22.2 billion, with AI semiconductor revenue alone accounting for $10.8 billion. Broadcom CEO Hock Tan noted that the momentum is accelerating, expecting AI-related chip revenue to grow over 200% year-over-year to $16 billion in the next quarter.
For Apple, cementing this partnership is vital given its recent manufacturing hurdles.
Apple’s primary foundry partner, Taiwan Semiconductor Manufacturing Co. (TSMC), has been stretched thin by massive demand from AI giants like NVIDIA Corp., a constraint Apple CEO Tim Cook noted had previously held back iPhone sales.
Surging data center demand caused memory chip costs to spike up by 98% in early 2026, forcing Apple to raise prices on its MacBooks and iPads this past June.
While Apple is in discussions with Intel Corp. to manufacture future chips within the United States, analysts warn that high-volume production from U.S. plants is unlikely to materialize until late 2027.
