Apple to replace key Broadcom chip with in-house design
Apple to replace key Broadcom chip with in-house design.
Apple Inc plans to replace a Broadcom Inc chip from its devices with an in-house design in 2025, Bloomberg News reported on Monday, citing people familiar with the matter.
The iPhone maker has been working to limit its reliance on other chipmakers, having moved to its own line of chips for recent models of its Mac computers, replacing those from Intel Corp.
Apple plans to replace Broadcom's Wi-Fi and Bluetooth chip, according to the Bloomberg News report, which added that Apple is the U.S. chipmaker's largest customer.
The Cupertino, California-based company accounts for about 20% of Broadcom's revenue.
Apple's decision is likely to hit Broadcom revenue by about $1 billion to $1.5 billion, said Stacy Rasgon, an analyst with financial services firm AB Bernstein.
He, however, added that Broadcom's radio frequency, or RF, chips were complex to design and manufacture and were unlikely to be replaced in the short term.
Shares of Broadcom ended 2% lower.
Apple and Broadcom did not immediately respond to a Reuters request for comments.
Apple is also looking to swap out Qualcomm Inc's cellular modem chips with its own by the end of 2024 or early 2025, according to the report.
Qualcomm has said it believes Apple will phase out its chips. Apple uses Qualcomm's X65 for 5G modem in its iPhone 14 line and is expected to deploy a newer version of the same chip in the iPhone 15 models likely to be released later this year, according to Jefferies' analyst William Yang.
A Qualcomm spokesperson pointed to the company's November statement where it said it expects "minimal contribution from Apple product revenue in fiscal '25."
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