Bloomberg News reported on Monday that Apple is planning to switch out the Broadcom chip in its devices with an in-house design by the year 2025, according to people familiar with the situation.
Apple has been making efforts to reduce its dependence on other chip manufacturers, having already replaced Intel’s components with its own in newer Mac computer models. Moreover, the tech giant is reportedly going to substitute Broadcom’s Wi-Fi and Bluetooth chip with its own; Apple is the largest customer of the US chipmaker.
Around 20% of Broadcom’s revenue is attributed to Apple, who is based in Cupertino, California. According to Stacy Rasgon, an analyst for the financial services company AB Bernstein, this could lead to a loss of up to $1.5 billion (roughly Rs. 12,336 crore) for Broadcom.
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Despite this, Rasgon believes that Broadcom’s radio frequency, or RF, chips are too complex to be replaced in the near future.
Broadcom’s stock closed 2% lower on Tuesday after a report emerged that Apple is planning to replace Qualcomm’s chips in its iPhones by 2024 or 2025. Apple and Qualcomm did not immediately respond to Reuters’ request for comment.
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Jefferies analyst William Yang said Apple is expected to deploy Qualcomm’s X65 5G modem in its iPhone 15 models, later this year. A Qualcomm spokesperson referred to the company’s November statement which said they expect “minimal contribution from Apple product revenue in fiscal ’25.”