Apple signs over $30 billion custom ASIC agreement with Broadcom, to produce 15 billion chips in the US, cooperation extended to 2031

Mars Finance News, on July 8, Apple officially released on Wednesday the details of a multi-year agreement it reached with Broadcom. The total amount is expected to exceed $30 billion. The two sides will jointly design and produce custom ASIC chip components and cutting-edge wireless connectivity technologies for multiple Apple products. Under the agreement, Broadcom will manufacture more than 15 billion chips in the United States, and will invest $1.5 billion to expand its manufacturing plant in Fort Collins, Colorado. The plant mainly produces FBAR filters and advanced RF components—core chips that enable wireless communication for devices such as iPhone and Mac. Apple has been collaborating with Broadcom on developing this technology since 2023.

In a statement, Apple CEO Tim Cook emphasized that this move “further demonstrates our steadfast commitment to U.S. manufacturing and innovation.” Broadcom CEO Hock Tan said, “We are honored to continue deepening our relationship after decades of successful cooperation.” This agreement is the largest collaboration project to date under Apple’s previously announced four-year $600 billion U.S. investment plan.

The strategic upgrade of this agreement lies in expanding from traditional RF components to fully custom ASIC chips. This closely aligns with earlier reports that Apple and Broadcom are co-developing an AI server processor codenamed “Baltra.” The chip is expected to use TSMC’s N3P process for mass production in 2026, aiming to provide customized computing power for Apple’s internal AI workloads.

For Broadcom, Apple contributes approximately 20% of annual revenue. This renewal provides long-term revenue visibility and validates the irreplacability of its custom ASIC business model. Broadcom has already expanded its AI ASIC customer footprint to leading technology companies such as Google, Meta, ByteDance, and OpenAI. In the first quarter, AI-related revenue reached $8.4 billion, up 106% year over year. JPMorgan expects Broadcom’s AI revenue to grow 2 to 2.5 times in 2027 and double again in 2028.

Worth noting is that this agreement is signed on the eve of Cook’s stepping down. Cook will move to Executive Chairman on September 1, and Ternus, Senior Vice President of Hardware Engineering, will take over as CEO. With the new agreement, Apple is expected to find it difficult to fully shift to self-developed cellular basebands before 2031, meaning the self-developed replacement timeline is longer than many outside observers had expected.