Broadcom and Apple Extend Custom Chip Supply Deal Through 2031

Semiconductor giant Broadcom and technology titan Apple have agreed to extend their long-standing technology collaboration until 2031. This strategic move encompasses the development and supply of custom-designed chips for Apple's future generations of products. The agreement holds significant importance for both companies in strengthening their positions in the dynamic technology market.

In a filing with the U.S. Securities and Exchange Commission (SEC), Broadcom announced it has entered into new multi-year long-term agreements to develop and supply a range of custom Application-Specific Integrated Circuit (ASIC) silicon products for use in multiple generations of Apple products. Apple is one of Broadcom's largest customers, accounting for approximately 20% of its annual revenue. The two companies previously signed a multi-billion-dollar agreement in 2023 covering 5G radio frequency components and cutting-edge wireless connectivity components. Despite Apple's efforts to develop its own in-house chips, such as cellular modems (like C1 and C1X) and Wi-Fi chips (like N1), it continues to rely on Broadcom for critical areas like wireless connectivity and radio frequency components.

Following the announcement, Broadcom shares (NASDAQ: AVGO) saw a significant rise of between 4% and 6% in premarket trading and during Monday's session. Apple shares (NASDAQ: AAPL) also reacted positively with an increase of nearly 1%. This development contributed to a broader rebound in the semiconductor sector, highlighting investors' emphasis on long-term supply agreements and stability in the industry.

This extension of collaboration takes place against a backdrop of rising costs and instability in global chip supply chains. Notably, memory chip prices surged by as much as 98% in early 2026, driven by increasing demand from artificial intelligence (AI)-focused data centers. Apple's strategy of securing long-term supply contracts acts as a hedge against such market fluctuations, ensuring a continuous flow of critical components.

Analysts indicate that this agreement provides Broadcom with highly coveted, long-term revenue visibility stretching through the end of the decade. For Apple, it enhances supply chain resilience while allowing the company to accelerate its in-house chip development processes. Furthermore, Broadcom's technology is expected to play a critical role in Apple's AI infrastructure and cloud-based AI features, including its in-development AI server chips, codenamed Baltra, planned for rollout by 2027.