Apple Collaborates with Broadcom on Advanced AI Chip Development, Reports The Information

Apple Collaborates with Broadcom on New AI Chip

Source: Yahoo Finance

Development of AI Chip

• Apple is partnering with Broadcom to create its first server chip designed specifically for artificial intelligence processing.
• The chip, codenamed Baltra, aims for mass production by 2026.
• This initiative aligns Apple with other top tech firms focusing on in-house chip development to power AI services and reduce dependency on Nvidia's costly processors.

Manufacturing Insights

• The chip will utilize advanced manufacturing technology from Taiwan Semiconductor Manufacturing Co (TSMC), specifically the N3P process.
• Broadcom shares saw a 5% increase following the announcement, underlining market confidence in the partnership.

Strategic Moves in the Semiconductor Market

• This collaboration follows a multi-billion-dollar agreement between Apple and Broadcom for the development of 5G components.
• Apple's commitment to its own server chips signals a broader industry trend to lessen reliance on external suppliers, particularly Nvidia.
• The custom chip market is projected to escalate to $45 billion by 2028, benefiting companies like Broadcom and its competitor, Marvell.

Market Context and Implications

• Broadcom has reported a 54% increase in share price in 2024 driven by the rising demand for generative AI solutions.
• The push for diversified supply chains by major cloud services showcases the mounting interest in proprietary hardware in tech.