Broadcom has announced an extension of its long-standing partnership with Apple through 2031, strengthening a strategic relationship that has played a key role in the iPhone maker’s hardware ecosystem.

The announcement boosted Broadcom’s shares by nearly 4% in premarket trading, reflecting investor confidence in the chipmaker’s long-term growth prospects.

Under the expanded agreement, Broadcom will continue to develop and supply a range of custom semiconductor solutions for Apple devices.

The company has been a critical supplier to Apple for years, providing custom radio frequency (RF) chips used in iPhones, Wi-Fi and Bluetooth connectivity chips, and other networking semiconductors that enable seamless wireless performance across Apple’s product lineup.

Apple remains one of Broadcom’s most significant customers, contributing roughly 20% of the chipmaker’s annual revenue, according to industry estimates. The renewed agreement underscores Apple’s strategy of securing long-term partnerships with key suppliers to strengthen supply chain resilience and ensure access to advanced semiconductor technologies amid growing global demand.

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The two companies have steadily expanded their collaboration in recent years. In 2023, Apple and Broadcom signed a multibillion-dollar deal under which Broadcom agreed to develop and manufacture advanced 5G radio frequency components in the United States, supporting Apple’s efforts to enhance wireless performance while investing in domestic manufacturing.

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The extended partnership also comes as demand for custom chips accelerates, driven by the rapid adoption of artificial intelligence. The growing importance of AI inference—the process through which AI models generate responses to user queries—has increased the need for highly specialized processors and intensified competition among semiconductor companies.

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Although Apple has expanded its in-house chip design capabilities with its custom Apple Silicon processors and the recently introduced C1 cellular modem, it continues to depend on Broadcom for critical wireless connectivity, networking, and radio frequency technologies, highlighting the strategic importance of the partnership for both companies.