Broadcom extends Apple chip partnership through 2031, shares jump 4%

Broadcom's multiyear chip supply deal with Apple locks in revenue visibility through the next decade as the iPhone maker deepens its reliance on custom silicon.

Broadcom Inc. said Monday it has agreed to expand its technical collaboration with Apple Inc. through 2031, covering the development and supply of a range of custom chips for Apple's product lineup. The extension sent Broadcom shares up more than 4% in pre-market trading on the Nasdaq.

"This agreement secures long-term strategic alignment between two of the industry's most important chip partners," Broadcom said in the statement. The company did not disclose the financial terms of the expanded deal.

The partnership extension covers multiple chip categories, including radio frequency components, wireless connectivity modules, and other custom silicon that Apple has increasingly designed in-house rather than purchasing off-the-shelf from merchant suppliers. Broadcom has been one of Apple's key chip vendors for over a decade, supplying components that power the iPhone, iPad, Mac, and Apple Watch lines.

For Broadcom, the deal provides revenue visibility through the end of the decade at a time when the company is also deepening its custom AI chip business with Google and Anthropic. In April, Broadcom disclosed a separate agreement to develop Google's next-generation tensor processing units and supply networking components for Anthropic's AI infrastructure through 2031. The company holds more than 70% of the custom AI chip market, according to its first-quarter earnings report, which showed AI revenue of $8.4 billion — up 106% year over year.

Apple's decision to extend the partnership signals its continued preference for custom-designed chips over standard components, a strategy that has given it tighter control over performance, power efficiency, and supply chain timing. The company has been moving key chip functions in-house with its own A-series and M-series processors but continues to rely on Broadcom for connectivity and analog components where internal alternatives are not yet viable.

The broader semiconductor sector has been volatile in recent weeks. The iShares Semiconductor ETF (SOXX) closed at $566.32 on July 3, down 5.6% on the day, after a global tech selloff triggered by AI valuation concerns and rate fears. The ETF has a 52-week range of $232.33 to $655.95 and a beta of 2.71, reflecting the sector's high sensitivity to macro shifts.

Broadcom shares, which have gained roughly 40% year to date, trade at about 28 times forward earnings. The Apple deal extension removes a key overhang for investors who had questioned whether the iPhone maker might eventually replace Broadcom with internally developed alternatives. By locking in supply commitments through 2031, Broadcom has effectively closed that window for the foreseeable future.

This article is for informational purposes only and does not constitute investment advice.