Apple signs multi-billion deal with Broadcom for US-made 5G chips
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Apple Inc. has entered into a multi-year, multi-billion-dollar agreement with American chipmaker Broadcom as part of its efforts to source U.S.-made components, a press release said. Further details of the deal have not been disclosed.
The recent agreement is part of Apple's commitment to spending $430 billion toward suppliers and manufacturers based in the U.S. The company, which has previously revealed very little details about its suppliers, has been facing pressure for its over-reliance on Chinese component manufacturers.
This is when U.S.-China relations are on the brink of a collapse, and companies in Silicon Valley could face severe damages if such a situation comes to pass.
Apple ties up with Broadcom for 5G components
Apple has an existing working relationship with San Jose, California-headquartered Broadcom, where it sources wireless components. One-fifth of Broadcom's annual revenues in the past two years have come from Apple. In 2020, the companies had signed a three-year $15 billion deal expected to expire in June, as per Reuters.
In a press release, Apple added that the company helps support more than 1,100 jobs at Broadcom's Fort Collins manufacturing facility, and the new agreement will enable the latter to invest in "critical automation" and "upskilling technicians and engineers". “We’re thrilled to make commitments that harness the ingenuity, creativity, and innovative spirit of American manufacturing," said Tim Cook, CEO of Apple.
The new agreement, whose details have not been revealed, centers around 5G radio frequency components. As per a regulatory filing, Broadcom has entered into two multiyear statements of work with Apple for the supply of high-performance radio frequency and wireless components, FT reported.
Apple also added that it was looking at Broadcom's bulk manufacturing facilities to source film bulk acoustic resonator (FBAR) resonators, part of the radio-frequency systems that helps Apple devices connect to mobile data networks. The chips will be designed and built in U.S-based manufacturing hubs such as Broadcom's Fort Collins facility.
“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 U.S. economy because we have an unshakable belief in America’s future,” Cook added.
Apple has been looking to diversify its supply chain and has begun sourcing components from India and Vietnam. The Cupertino-based has also confirmed that it sources chips from Taiwan Semiconductor Manufacturing Co's new plant in Arizona, which is currently under construction.
Apple also has an agreement with another American chipmaker, Qualcomm, to power 5G modems in its iPhones which are expected to be released next year.
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