Chip manufacturer Broadcom and tech giant Apple have signed a deal on the development of 5G technology. With the billion-dollar deal, Apple ensures that important parts are produced in the US. ‘Preference is increasingly given to production on our own soil.’
Both parties are not disclosing financial details, but Apple speaks in a press release of a multibillion-dollar deal. According to Jordy Beuving, stock market analyst at deaandeelhouder.nl, the contract stems from an earlier announcement by Apple to invest hundreds of billions of dollars in the American economy.
Apple has said in 2021 that it will invest $ 430 billion in five years. And in 2020 there was already a deal between Apple and Broadcom, which was then worth fifteen billion dollars, “says Beuving. This is certainly good news for Broadcom. Apple accounts for about 20 percent of their revenue.
Apple’s press release emphasizes job creation in the US. In that respect, the deal with Broadcom is separate from the chip war with China, thinks Beuving. “It’s about creating American jobs. The supply chains of companies are being scrutinized and preference is increasingly given to production on our own soil.’
Apple has been wanting to move the production of iPhones from China to India for some time, but according to Beuving, there is also increasing focus on production in the US. CEO Tim Apple, as Trump once called him, has reiterated that his company will continue to invest in the US. That says quite a lot.’
Earlier this year there were rumors that Apple wants to develop its own chips. This would be a chip intended for WiFi and Bluetooth, a component that is in principle supplied by Broadcom. ‘Then you saw that Broadcom’s share price fell by 5 percent. Then it’s good for Broadcom that Apple continues to do business with them.’