Broadcom has extended its long-standing relationship with Apple through 2031, signing new multi-year deals to design and supply a range of custom chips for the iPhone maker.
The deal deepens the supplier’s most important relationship in consumer electronics, and sent Broadcom shares up 4% as investors read it as a guarantee of years of locked-in revenue. It also sits while the rest of the industry is scrambling to find long-term chip supply.
Broadcom has been inside Apple products for years, even if its name rarely appears in them. It provides the radio frequency components that allow iPhones to connect to cellular networks, as well as Wi-Fi and Bluetooth chips and other communication components, the invisible silicon that makes the phone actually communicate. The new agreements include custom ASIC products, application-specific chips designed for specific tasks, for many future generations of Apple hardware.
The relationship trade-off goes both ways. Analysts estimate that Apple accounts for about 20% of Broadcom’s annual revenue, making the iPhone maker one of its biggest customers and giving an extension like this a real explanation for the visibility of Broadcom’s profits. Knowing that a fifth of your revenue is contracted by 2031 is the kind of certainty that chip suppliers rarely get.
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For Apple, the logic is to strengthen the supply chain. The company has spent recent years locked into long-term deals with chipmakers it relies on, hedges against shortages and the country’s disruptions that have repeatedly disrupted the electronics industry. Broadcom’s promising silicon years are taking away from the supply chain Apple has been working hard to make more predictable.
The deal builds on the foundation laid in 2023, when the two companies announced a multibillion-dollar deal for Broadcom to develop and build parts of the 5G radio spectrum in the United States. That previous agreement was as much about where the chips would be made as what they would do, and the new agreements expand on the same concept of early commitment and long-term commitment.
There is a subtle signal in time, too. Apple has been trying for years to redesign its communications silicon and reduce its reliance on outside suppliers, and the extension that runs until 2031 suggests the transition is slower than the company had hoped. Analysts read the length of the deal as a sign that Apple’s move into home radio chips is likely to take several years.
The background is the industry’s race to build custom silicon for everything. From hyperscalers building their own AI accelerators to Google touting next-generation TPU, big tech companies are increasingly looking for chips that are tailored to their needs rather than off-the-shelf components. Broadcom has positioned itself as a partner that helps them do it, and Apple’s extension is a marquee example of that business.
That custom silicon business has become the most exciting part of Broadcom’s story. The company’s work designing bespoke AI chips for large cloud clients has fueled recent price increases, and an anchor client like Apple committing for another five years reinforces the point that Broadcom is a key supplier to companies building the future of computing, not just a seller of legacy components.
For Apple, keeping Broadcom close buys flexibility. Having a proven partner locked in by 2031 means it can pursue its own communication chips at its own pace without risking a supply gap if that effort falls through, making the deal an insurance policy against Apple’s internal ambitions as a vote of confidence in Broadcom.
What the deal doesn’t do is change the near-term product roadmap in any tangible way. Encapsulating chips will quietly appear inside future iPhones and other devices, performing connectivity tasks that most users don’t think about. The importance is structural: two companies that need each other have decided to stay tied for another five years, and the market has taken it as good news for both.
