Apple to Replace Broadcom Chip with In-House Design – Report

US tech giant Apple Inc. is reportedly planning to shift from using a key chip of Broadcom Inc. on its devices to a homegrown design by 2025.

Citing sources with knowledge of the matter, it was reported that the Cupertino, California-based company looks to replace Broadcom’s Wi-Fi and Bluetooth chip with an in-house one.

The sources also said Apple aims to have its first cellular modem chip ready by the end of next year or early 2025, allowing it to swap out ones from Qualcomm Inc.

Qualcomm has expected Apple to transition away from its chips. Apple uses Qualcomm’s X65 for 56 modems in its iPhone 14 series and is expected to use a newer version of the chip in the iPhone 15 line, which could launch later this year.

Apple Move Potentially Upending the Chip Industry

Apple’s decision came as it worked to reduce its reliance on other chipmakers. The world’s most valuable tech company has transitioned to its own design, the Apple Silicon, for its recent Mac models and replaced processors from Intel Corp.

However, the move risks hurting the semiconductor sector, which generates billions of dollars by supplying Apple components.

According to the sources, Apple is the biggest customer of Broadcom, and the San Jose, California-based chipmaker has described the iPhone maker as its large North American customer.

With Apple representing around 20% of Broadcom’s revenue, analyst Stacy Ragson said the move might push the semiconductor firm’s revenue down by about $1 billion to $1.5 billion.

Apple’s iPhone, its main profit driver, has brought in more than half of the $394.3 billion in revenue in 2022 and has helped fuel growth at Broadcom.

Still, Broadcom provides other components to Apple, including radio-frequency (RF) chips that are unlikely to be dropped in the short term due to their complex designs and production process. The company also supplies chips for conducting wireless charging.

A representative for Apple declined to comment on the matter, while Broadcom was not immediately available for comment.