What you need to know
- Apple has signed two new agreements with California chipmaker Broadcom.
- It signed two multiyear agreements to provide wireless components.
- The two deals, combined with a 2019 agreement could net the San Jose company $15 billion in revenue.
Apple has reportedly signed two multiyear deals with California chipmaker Broadcom, bringing the total worth of its agreements with the company to $15 billion.
According to Bloomberg:
(Bloomberg) -- Broadcom Inc. disclosed new agreements to provide components for Apple Inc. devices released through the middle of 2023.
The San Jose, California-based chipmaker said it entered into two multiyear pacts "for the supply of a range of specified high-performance wireless components and modules to Apple for use in its products." That's in addition to another similar agreement that Broadcom reached with Apple in 2019. The three deals could generate about $15 billion in future revenue, Broadcom added.
Broadcom shares rose more than 2% in late trading, while rival Skyworks Solutions Inc. dropped as much as 7.7%.
Broadcom supplies Apple with radio-frequency chips, which it uses in its mobile devices (iPhone, iPad and Apple Watch) to connect to cellular networks. It has also reportedly supplied Wi-Fi chips to Apple in the past.
As noted in the report, the deal is so lucrative that Broadcom shares rose more than 2% towards the end of trading in the wake of the announcement. It's competitor, Skyworks Solutions, saw shares drop by 7.7%.
Earlier this month it was reported that Apple's Taiwanese manufacturing partner, TSMC is due to begin work producing Apple's new A14 iPhone chips, based around a new 5nm architecture, in Q2 of 2020. This would put us on course for a standard, September iPhone announcement coming later this year.
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