Apple multibillion-dollar Broadcom deal seems mostly for 5G
Have Apple’s silicon designers cracked the 5G conundrum?
Apple has announced a huge multibillion-dollar component supply deal with Broadcom which means critical parts for future products will be manufactured in the USA.
These investments are part of Apple’s 2021 commitment to invest $430 billion in the U.S. economy over five years. The company said it is “on pace” to meet that target as it spends with American suppliers, including data center investments, capital expenditures in the U.S., and other domestic spend.
Deal seems focused on 5G
The Broadcom deal is particularly interesting, given Apple’s continued effforts to deliver its own self-designed 5G modems. Apple says that under the component supply deal. Broadcom will develop 5G radio frequency components — including FBAR filters — and cutting-edge wireless connectivity components. The FBAR filters will be designed and built in several key manufacturing and technology hubs, including Fort Collins, Colorado.
In a statement, Apple also said 5G technology is shaping the future of next-generation consumer electronics — and explained how it is spending tens of billions of dollars to develop this field in the U.S.
Apple already helps support more than 1,100 jobs in Broadcom’s Fort Collins FBAR filter manufacturing facility, and the partnership will enable Broadcom to continue to invest in critical automation projects and upskilling with technicians and engineers.
What Apple said
“We’re thrilled to make commitments that harness the ingenuity, creativity, and innovative spirit of American manufacturing,” said Tim Cook, Apple’s CEO.
“All of Apple’s products depend on technology engineered and built here in the United States, and we’ll continue to deepen our investments in the U.S. economy because we have an unshakable belief in America’s future.”
What Broadcom said
In a SEC filing, Broadcom shed a little additional yet opaque light on the arrangement, writing:
“Certain subsidiaries of Broadcom Inc. (“Broadcom”) have entered into two separate multi-year statements of work (the “2023 SOWs”) with Apple Inc. (“Apple”). The 2023 SOWs are for the supply of a range of specified high-performance RF and wireless components and modules for use in Apple products. Pursuant to the 2023 SOWs, Broadcom has agreed to supply Apple with specified components and modules for Apple products and to maintain and allocate to them sufficient manufacturing capacity and other resources to make these products.”
Apple’s business is building
In a press release, Apple claims to already support over 2.7 million jobs through direct employment, developer jobs in the thriving iOS app economy, and spending with more than 9,000 U.S. suppliers and manufacturers.
While Apple’s efforts to manufacture its own 5G modems is not now expected to bear fruit before 2024, it is known the company has invested vast resources in the effort. This latest investment likely reflects part of that.
The company also has teams already focused on the development of 6G modems in preparation for that standard to emerge in just under a decade.
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