Apple commits over $30 billion to Broadcom to produce billions more US chips
Apple said on Wednesday it is expanding its partnership with chipmaker Broadcom through a multi-year agreement expected to exceed $30 billion, marking the iPhone maker's largest US manufacturing commitment to date.
The deal will lead to the production of more than 15 billion US-made chips and includes a $1.5 billion expansion of Broadcom’s facility in Fort Collins, Colorado. However, Apple did not yet provide a timeline for when the new manufacturing capacity will come online.
“The new agreement, expected to exceed $30 billion, will lead to the production of more than 15 billion U.S.-made chips and support hundreds of American jobs,” Apple said in a press release.
Broadcom to produce wireless connectivity components in the US
Broadcom has long supplied Apple with connectivity components, but the new agreement expands the partnership to include US-made custom silicon, according to CNBC. Apple said that Broadcom will manufacture wireless components that enable its devices to connect with cellular, Wi-Fi and Bluetooth networks.
“Apple and Broadcom have a long history together, and this new phase of our partnership further accelerates our commitment to American manufacturing and innovation,” said Tim Cook, the chief executive officer of Apple.
“The cutting-edge components built in Fort Collins are essential to delivering the incredible performance and connectivity our customers expect, and we’re proud to deepen our investments in US-based suppliers that share our commitment to excellence and innovation," he added.
Apple's $600 billion US investment pledge
According to the release, Apple has been working with the administration and businesses across America to help create an end-to-end silicon supply chain in the country, and the recent announcement advances those efforts.
These investments are part of Apple’s commitment to invest $600 billion in the US economy over four years, supporting manufacturing, job creation, and technology development across the country.
Broadcom also disclosed in a filing with the Securities and Exchange Commission on Monday that it had entered into new long-term agreements with Apple to develop and supply “custom ASIC silicon products” for multiple generations of Apple products through 2031.
ASICs are highly specialised microchips which are custom-built for one specific function. While CPUs and GPUs handle diverse tasks, ASICs maximize performance and energy efficiency for specific algorithms like neural networks. In the current tech environment, they are increasingly being used for artificial intelligence workloads.
“With Apple’s newest commitment, we’re pleased to expand our manufacturing footprint in Fort Collins, where we create groundbreaking technology that connects people around the world," said Hock Tan, the president and chief executive officer of Broadcom.