Apple and Broadcom Announce $30 Billion Chip Deal
Apple and Broadcom announced a $30 billion deal to supply radio-frequency chips through 2031. The deal includes 15 billion chips from Broadcom's Colorado plant, with Broadcom investing $1.5 billion to expand capacity. Broadcom shares rose over 4%, while Apple shares edged lower.
Key Numbers
Apple (AAPL) and Broadcom (AVGO) announced a $30 billion deal to supply FBAR filters—radio-frequency chips used for wireless connectivity in iPhones and iPads—through 2031. The deal expands a prior partnership announced in 2023.
Deal Details
- Value: $30 billion.
- Duration: Through 2031.
- Products: FBAR filters (radio-frequency chips).
- Source: Broadcom's Fort Collins, Colorado facility.
- Broadcom Investment: $1.5 billion to expand and modernize the plant.
- Chip Volume: 15 billion chips.
Context
The deal is part of Apple's broader push to source critical components from the U.S., aligning with President Donald Trump's goal of domestic manufacturing. While full iPhone assembly in the U.S. remains unlikely in the near term, sourcing key parts from American suppliers is feasible.
Market Reaction
Broadcom shares rose more than 4% on the news, while Apple shares edged down marginally.
What It Means for Investors
The deal solidifies Broadcom's role as a key Apple supplier and provides long-term revenue visibility. For Apple, it diversifies its supply chain and reduces reliance on Asia, though it has no immediate impact on quarterly earnings.
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