Apple inks multibillion-dollar deal with Broadcom in bid to use US-made chips

Apple has signeda multi-year, multibillion-dollar deal with Broadcom to manufacture semiconductor chips in the US. According to the deal, Broadcom, a technology and advanced manufacturing company, will manufacture 5G radio frequency components and wireless components for Apple.

“We’re thrilled to make commitments that harness the ingenuity, creativity, and innovative spirit of American manufacturing,” Apple CEO Tim Cook said in a release. "All of Apple’s products depend on technology engineered and built here in the United States, and we’ll continue to deepen our investments in the USeconomy because we have an unshakable belief in America’s future," he added.

Shares of Broadcom up three per cent

As soon as the deal was announced, shares of Broadcom went up three per cent Tuesday morning. Shares of Apple were down less than one per cent. Apple clarified that the deal with Broadcom was part of its 2021 commitment to invest a whopping $430 billion in the US economy.

Broadcom will manufacture 5G radio components for Apple, including FBAR filters and other wireless connectivity components. According to CNBC, these components will be different from 5G modems developed by Qualcomm.

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Apple already supports more than 1,100 jobs at Broadcom’s Fort Collins FBAR filter manufacturing facility, and the company has said the deal will allow it to further invest in “critical automation projects and upskilling” with engineers and other technicians.

It must be noted that Apple already partners with Broadcom for its Wi-Fi and Bluetooth components.

Apple’s long-term plans to shift to made-in-US chips

Apple is working to shift its semiconductor supply chain out of China due to the obvious risks involved. Apple CEO Cook last December said his company will buy chips from TSMC’s Arizona factory once it starts operations.

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Taiwan Semiconductor Manufacturing Company, the largest foundry with more than half of the global market share, will be the owner and operator of the chip plants in Arizona. TSMC is best known globally for producing the most cutting-edge CPUs, including those used in the most recent iPhones, iPads, and Macs.

TSMC’s facilities in Arizona will be able to produce the latest processing chips, such as those used in Apple's A- and M-series processors and Nvidia's graphics processors, which are 4-nanometer and 3-nanometer in size.

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