Apple’s Shift to In-House Chips: What It Means for Broadcom

Apple Inc’s AAPL is set to transition to in-house chips for Bluetooth and Wi-Fi connections starting in 2025, a move that could significantly affect its long-time partner, Broadcom Inc AVGO.

Apple’s New Chip Strategy

The new chips will allow Apple devices to connect wirelessly to networks and pair with accessories like headphones. This step marks a shift in Apple’s strategy as it aims to enhance its device ecosystem.

Collaboration with Taiwan Semiconductor

To power its upcoming products, Apple has partnered with Taiwan Semiconductor Manufacturing Co TSM. Reports indicate that TSMC has already begun making the Proxima chips that will debut with Apple products in 2025, according to sources cited by Bloomberg.

Also Read: STMicroelectronics and Qualcomm Launch New IoT Module to Simplify Wireless Connectivity

Enhanced Wireless Connectivity

The new chips will offer compatibility with the Wi-Fi 6E standard, providing improved speed and reliability. Apple plans to release these Wi-Fi and Bluetooth chips in 2025, initially for its home devices, such as the updated TV set-top box and the HomePod mini smart speaker.

Future Product Plans

Apple plans to extend the use of these components to iPhones in 2025 and later release them for iPads and Macs by 2026. Notably, Broadcom will continue to supply the radio frequency filters for these modems, maintaining some level of collaboration between the two companies.

AI Developments and New Partnerships

Additionally, Apple has enlisted Broadcom to help develop a server chip focused on AI tasks, showcasing its ongoing commitment to enhancing AI capabilities, an area currently dominated by Nvidia Corp NVDA. Apple has been developing its Apple Chips in Data Center project for several years, aimed at improving AI inference while working with TSMC on chip design and production.

Market Outlook

Wedbush analyst Dan Ives predicts that Apple’s market cap will reach $4 trillion by early 2025, reflecting consumer enthusiasm for the company’s AI initiatives. So far this year, Apple’s stock has risen by 34%.

Stock Performance

Price Action: AAPL stock has experienced a slight decrease of 0.48%, sitting at $246.76 on the last check on Friday.

Also Read:

Photo via Apple