Apple Inc has unveiled a new multiyear agreement with longtime chip supplier Broadcom Inc worth more than US$30 billion (A$43 billion).
The deal deepens the iPhone maker’s investment in U.S. semiconductor manufacturing and is the largest commitment under its American Manufacturing Program (AMP) initiative to lift production in the United States of key Apple components.
Under the agreement announced on Wednesday, Broadcom will design and produce custom silicon components and advanced wireless connectivity technologies for Apple products, with more than 15 billion chips to be made in the U.S. by 2031.
It also includes a $1.5 billion expansion and modernisation of Broadcom's manufacturing facility in Fort Collins, Colorado.
"Apple and Broadcom have a long history together, and this new phase of our partnership further accelerates our commitment to American manufacturing and innovation," Apple Chief Executive Tim Cook said in a news release.
He said Apple was proud to deepen its investments in U.S.-based suppliers that shared its commitment to excellence and innovation with the components to be built in Fort Collins essential to delivering the performance and connectivity customers expected.
"Broadcom is proud to continue to work with Apple after decades of success together, and we share a strong commitment to American innovation," Broadcom President and Chief Executive Hock Tan said.
"With Apple's newest commitment, we're pleased to expand our manufacturing footprint in Fort Collins, where we create ground-breaking technology that connects people around the world."
These investments are part of Apple’s commitment to invest $600 billion in the U.S. economy over four years, supporting manufacturing, job creation, and technology development across the country.
The announcement was welcomed by investors with Broadcom shares (NASDAQ: AVGO) closing $17.91 (4.83%) higher at $388.69, capitalising the company at $1.85 trillion.
There was less impact on the price of Apple shares (NASDAQ: AAPL) which closed $2.73 (0.88%) higher at $313.39, capitalising the company at $4.6 trillion and making it the world’s second largest company after Nvidia.
