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Apple and Broadcom extend their custom chip supply deal through 2031, covering AI server infrastructure as Broadcom shares surged more than 5% on the news.
- Broadcom will develop and supply custom ASIC chips for Apple through 2031, extending a partnership originally formalized in 2023.
- AVGO shares gained 5.32%, to $379.18, on July 6 as the agreement removes a near-term revenue concentration risk for the chipmaker.
- The deal spans connectivity components and AI server silicon, underpinning Apple's Baltra chip program slated for mass deployment in 2027–2028.
Lead
Apple (AAPL) and Broadcom (AVGO) announced on July 6, 2026 an extension of their custom semiconductor supply agreement through 2031, committing Broadcom to develop and deliver application-specific integrated circuit chips across multiple generations of Apple products. The disclosure, made through a regulatory filing, confirmed an expanded product scope that market participants read as encompassing compute-oriented AI silicon alongside the connectivity hardware that has historically anchored the relationship. Financial terms were not disclosed.What Happened
The two companies first formalized a structured custom chip supply arrangement in 2023. The latest extension adds years to that commitment and broadens its mandate. Under the revised terms, Broadcom will develop ASIC silicon products covering radio-frequency components — Wi-Fi, Bluetooth, and cellular chips used in the iPhone and other devices — as well as chip categories tied to Apple's growing artificial intelligence server infrastructure.
The filing describes the scope as covering "multiple generations of Apple products," language that encompasses near-term device cycles and the longer-horizon AI data center deployments that have drawn increasing investor attention. The Apple Broadcom deal 2031 is therefore at once a renewal of an established supply relationship and a forward commitment to a new category of compute-focused silicon.
Market Reaction
Broadcom shares advanced 5.32% to $379.18 on July 6, one of the stock's largest single-session gains in recent months. Apple shares gained approximately 1.6% on the same session. The asymmetry reflects the structural importance of the customer relationship: Apple represents close to 20% of Broadcom's annual revenue, and removing a multi-year revenue cliff through an extended agreement carries material valuation significance for the chipmaker. Apple, with a market capitalization exceeding $3 trillion, faces minimal concentration risk from any individual supplier.
Strategic Context
The extension is the clearest public signal yet that AAPL semiconductor strategy involves deepening, not reducing, reliance on Broadcom for chip engineering. Apple has invested heavily in vertical integration — its M-series and A-series processors are designed in-house and manufactured by TSMC — but the connectivity and networking layer of its products, and increasingly its AI server architecture, depends on Broadcom's ASIC design capabilities.
Broadcom occupies a differentiated position in the global tech supply chain: alongside Marvell Technology, it is one of the few chip designers with proven engineering depth in building custom ASICs at the scale required by the world's largest technology platforms. The 2031 extension cements that role for both Apple's consumer device ecosystem and its data center build-out, providing supply continuity through what is expected to be a period of accelerating AI capital expenditure.
AI and Technology Angle
The deal's timing aligns directly with Apple's accelerating push into proprietary artificial intelligence infrastructure. The company has been developing a custom AI server chip, internally codenamed Baltra, designed to handle inference workloads that support Apple Intelligence — its generative AI feature suite — through Private Cloud Compute servers. Broadcom's involvement centers on Baltra's networking and interconnect architecture, including chiplet-based designs that allow modular scaling of compute capacity.
TSMC's N3P process, an advanced variant of 3nm-class manufacturing, is slated to underpin Baltra production, with volume manufacturing expected in late 2026 and full data center deployment targeted for 2027 to 2028. The Apple Broadcom deal through 2031 spans the entire projected rollout and subsequent upgrade cycles for that AI infrastructure platform, providing both parties with a committed supply and development framework across multiple capital investment phases.
Outlook
The extended Apple Broadcom deal 2031 reflects a structural alignment between Apple's vertical integration ambitions and Broadcom's ASIC supply expertise. The agreement secures custom chip capacity across connectivity hardware and AI compute infrastructure at a moment when demand for purpose-built silicon is accelerating across the industry. For Broadcom, the partnership reduces revenue concentration risk and validates its positioning in the AI custom silicon market. For Apple, it ensures supply continuity for a semiconductor roadmap that now extends well into the next decade.
Mentioned tickers: AAPL, AVGO---
Sources:
- [Apple and Broadcom extend custom chip supply deal through 2031](https://finance.yahoo.com/technology/articles/apple-broadcom-extend-custom-chip-134056323.html)
- [Broadcom Extends Deal With Apple To Supply Custom ASIC Silicon Chips Through 2031](https://www.rttnews.com/3664858/broadcom-extends-deal-with-apple-to-supply-custom-asic-silicon-chips-through-2031-stock-gains.aspx)
- [Broadcom extends Apple chip partnership through 2031, stock climbs 5%](https://invezz.com/news/2026/07/06/broadcom-extends-apple-chip-partnership-through-2031-stock-climbs-5/)
- [Apple is reportedly making an AI server chip with Broadcom's help](https://www.macworld.com/article/2555054/apple-is-reportedly-making-an-ai-server-chip-with-broadcoms-help.html)
- [Broadcom, Apple Expand Partnership to 2031 With Custom Chips](https://finance.yahoo.com/technology/ai/articles/broadcom-apple-expand-partnership-2031-124305429.html) }}
