By Mark Gurman | Bloomberg
Apple, following through on a pledge to boost spending on US-made components, said its expanded agreement with Broadcom is expected to top $30 billion.
The deal will involve manufacturing more than 15 billion chips in the US, supporting hundreds of jobs, Apple said in a statement Wednesday. The iPhone maker also will help Broadcom upgrade its production facilities in Colorado.
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The announcement sheds new light on an arrangement that Broadcom announced Monday, when the chipmaker said the pact would run through 2031 but didn’t offer financial details.
Broadcom gained as much as 5% to $389.12 in New York trading on Wednesday. Apple shares were little changed at $310.09.
Apple said the spending is part of a previously disclosed $600 billion commitment to invest in the US. Chief Executive Officer Tim Cook touted the push alongside President Donald Trump in the Oval Office of the White House last year.
The Broadcom partnership will include a $1.5 billion investment in that company’s production plant in Fort Collins, Colorado. Advanced radio frequency components for wireless chips will be built at the site, Apple said.
“We’re grateful to the president and his administration for supporting important projects like this,” Cook said in the statement, adding that “the cutting-edge components built in Fort Collins are essential to delivering the incredible performance and connectivity our customers expect.”
Hock Tan, Broadcom’s CEO, said his company is “proud to continue to work with Apple after decades of success together.” Broadcom has long supplied Apple with wireless chips, including those for letting devices access Wi-Fi and Bluetooth, but Apple has moved to in-house designs for those components over the past year.
Still, Broadcom continues to provide other communication parts. And it’s working on chip technology that will support Apple’s effort to deploy its first dedicated artificial intelligence server as early as next year.
Cook, meanwhile, is stepping down as Apple’s CEO on Sept. 1 and will be replaced by longtime hardware chief John Ternus. Cook will remain at Apple as executive chairman and is expected to continue his role maintaining the company’s relationship with the White House.