Apple Secures Multibillion-Dollar Agreement with Broadcom for Domestic 5G Components

Part of Apple's $430 billion investment in the US economy

Apple has made an announcement regarding a new multi-billion dollar partnership with Broadcom, a chip giant, to supply 5G components manufactured in the United States. This multi-year agreement is in line with Apple's previous commitment to invest billions in the US economy.

According to Apple, their collaboration with Broadcom will involve the development of 5G radio frequency components, including advanced wireless connectivity components and film bulk acoustic resonator (FBAR) filters.

This deal is part of Apple's pledge in 2021 to invest $430 billion in the US economy over a span of five years. The FBAR filters will be designed and produced in various significant American manufacturing and technology hubs, such as Fort Collins, Colorado, where Broadcom operates a major facility. Apple highlights that it already supports over 1,000 jobs at this location.

Apple CEO Tim Cook expressed enthusiasm about making commitments that tap into the ingenuity, creativity, and innovative spirit of American manufacturing. Cook emphasized that all of Apple's products rely on technology engineered and manufactured in the United States, and the company intends to deepen its investments in the US economy due to its unwavering belief in America's future.

In an effort to diversify its manufacturing beyond China amid strained Sino-American relations, Apple has gradually reduced its dependence on Chinese manufacturing. Last year, it began producing some iPhone 13 models in India. Additionally, Apple is expanding its production facilities in Vietnam and plans to procure chips from TSMC's Arizona plant once it becomes operational.

Apple already stands as Broadcom's largest customer, accounting for approximately 20% of the chip firm's annual sales. In 2020, the iPhone maker entered into a three-year, $15 billion agreement with Broadcom for the purchase of wireless components. The expiration of that deal was set for June. The exact value and duration of the new agreement have not been disclosed by either company.

Earlier reports indicated that Apple's in-house 5G chip would not be ready for the upcoming iPhone 15 this year. Meanwhile, Qualcomm anticipates that the first iPhones without its 5G modems will be available as early as next year.

Following the news of the partnership, shares in Broadcom closed up 1.2%. Apple's shares, on the other hand, experienced a 1.5% decrease, although the company still retains the world's largest market capitalization of $2.7 trillion.

In conclusion, Apple's new multibillion-dollar deal with Broadcom for 5G components manufactured in the United States is a significant step towards diversifying its supply chain and investing in the American economy. This collaboration aligns with Apple's commitment to supporting domestic manufacturing and highlights its belief in America's future. By partnering with Broadcom, Apple aims to secure the necessary components for its products while reducing its reliance on Chinese manufacturing. The agreement also solidifies Broadcom's position as a key supplier for Apple, further strengthening their business relationship. Overall, this partnership reflects the evolving dynamics of the tech industry and highlights the importance of strategic collaborations in achieving long-term success.

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