Apple has agreed to a long-term, multibillion-dollar deal with Broadcom to produce semiconductor chips in the US. The deal will see Broadcom, a company that specializes in technology and advanced manufacturing, make 5G radio frequency and wireless components for Apple.
Apple CEO Tim Cook said in a statement that he was excited to make commitments that leverage the talent, innovation, and excellence of American manufacturing. “All of Apple’s products rely on technology designed and made here in the United States, and we’ll keep increasing our investments in the US economy because we have a firm faith in America’s future,” he said.
The deal boosted Broadcom’s shares by three per cent on Tuesday morning, while Apple’s shares dropped slightly by less than one per cent. Apple said the deal with Broadcom was part of its 2021 pledge to invest a massive $430 billion in the US economy.
Broadcom will make 5G radio components for Apple, such as FBAR filters and other wireless connectivity components. CNBC reported that these components will not be the same as 5G modems made by Qualcomm.
Apple already provides more than 1,100 jobs at Broadcom’s Fort Collins FBAR filter production facility, and the company said the deal will enable it to invest more in “essential automation projects and upskilling” for engineers and other technicians.
Apple also works with Broadcom for its Wi-Fi and Bluetooth components.
Apple’s plans to move to US-made chips in the long run Apple is trying to move its semiconductor supply chain away from China due to the evident risks. Apple CEO Cook said last December that his company will purchase chips from TSMC’s Arizona plant when it begins operations.
The chip plants in Arizona will be owned and run by Taiwan Semiconductor Manufacturing Company, the biggest foundry with more than 50 per cent of the global market share. TSMC is famous worldwide for making the most advanced CPUs, such as those in the newest iPhones, iPads, and Macs.
TSMC’s plants in Arizona will produce the most modern processing chips, such as those in Apple’s A- and M-series processors and Nvidia’s graphics processors, which are 4-nanometer and 3-nanometer in size.