Apple and Broadcom reach $ 15 billion chip supply agreement

Recently, Broadcom disclosed a new agreement that will provide parts for devices released by Apple before mid-2023.

The San Jose, California-based chip maker said it has signed two multi-year agreements with Apple to supply Apple with a specific series of high-performance wireless components and modules for use in its products. In addition, Broadcom reached another similar agreement with Apple in 2019. Broadcom added that these three transactions could generate approximately $ 15 billion in revenue in the future.

Broadcom shares rose 2% in recent trading, while rival Skyworks Solutions Inc. fell 7.7%.

Broadcom is Apple’s main supplier, providing radio frequency chips that allow iPhones, iPads and Apple Watches to connect to cellular data networks. In addition, Broadcom also provided Apple with other components, including chips that connect devices to Wi-Fi networks.

Broadcom listed its RF chip unit for sale last year. Thursday’s disclosure let potential acquirers know that they are establishing a substantial business relationship with Apple Corps of Cupertino, California.

It is reported that Apple usually has long-term agreements with major suppliers, but Apple is also developing its own parts.

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