Apple and Broadcom Collaborate on AI Chip for Mass Production by 2026

Apple is reportedly partnering with Broadcom to create its first server chip dedicated to artificial intelligence (AI) processing, according to a report by The Information. Internally code-named Baltra, the chip is expected to enter mass production by 2026, leveraging Taiwan Semiconductor Manufacturing Co.'s (TSMC) advanced N3P manufacturing technology.

This move positions Apple alongside other tech giants like Google, which also develops in-house AI chips, as companies aim to reduce dependency on Nvidia’s high-cost and limited-supply processors.

Leveraging Broadcom's Expertise

The collaboration with Broadcom isn’t new territory for Apple. Last year, the two companies signed a multi-billion-dollar agreement to develop 5G radio frequency components. Broadcom's deep involvement in AI and custom chip development has made it a major player in the generative AI boom. Its shares have surged 54% in 2024, following a nearly twofold increase in value the previous year.

Broadcom's CEO, Hock Tan, had previously highlighted the company’s role in enabling large-scale AI computing, which is critical to cloud providers’ efforts to diversify their supply chains.

Apple’s In-House Chip Success

Apple has a strong track record of designing custom chips for its devices, such as the M-series processors, which replaced Intel chips in its Mac laptops. At its annual developer conference in June, Apple revealed plans to integrate its own server chips to support AI-powered features across its product lineup.

This transition to in-house AI server chips underscores Apple's broader strategy to maintain greater control over its hardware and software ecosystems.

Competitive Landscape

Despite Apple’s progress, many tech companies still rely heavily on Nvidia for AI chips. Google stands out as a notable exception, thanks to its collaboration with Broadcom for its own AI chips.

Broadcom’s primary competitor in the custom chip market is Marvell. According to Marvell’s Chief Operations Officer Chris Koopmans, the market for custom chips could grow to $45 billion by 2028, likely split between the two companies.

Market Implications

Apple’s AI chip development aligns with a broader trend of tech companies investing in custom solutions to meet the growing demands of AI. By designing a chip optimized for AI workloads, Apple could potentially lower costs, improve supply chain stability, and enhance the performance of its AI-driven features.

Broadcom, in turn, stands to gain further from this partnership, reinforcing its position as a key player in the rapidly expanding generative AI space.

Looking Ahead

If successful, Apple’s AI chip project could revolutionize its server capabilities, enabling seamless AI processing across its ecosystem. With Broadcom’s expertise and TSMC’s cutting-edge manufacturing process, Apple is well-positioned to make significant strides in AI hardware.

As the demand for AI technologies grows, the collaboration between Apple and Broadcom could serve as a blueprint for other companies seeking to innovate in this competitive landscape.

Editor’s Note: This article was created by Alicia Shapiro, CMO of AiNews.com, with writing, image, and idea-generation support from ChatGPT, an AI assistant. However, the final perspective and editorial choices are solely Alicia Shapiro’s. Special thanks to ChatGPT for assistance with research and editorial support in crafting this article.