Apple to drop key Broadcom chip in 2025 for in-house design – Bloomberg News

Apple employees work in an Apple Store at the Grand Central Terminal in the Manhattan borough of New York City, New York, U.S., Jan 4, 2022. REUTERS/Carlo Allegri/File photo

Apple Inc plans to drop a Broadcom Inc chip used in its devices in 2025 and use an in-house design instead, Bloomberg News reported on Monday citing people familiar with the matter.

The iPhone maker has been working to limit its reliance on other chipmakers, having moved to its own line of chips for recent models of its Mac computers, replacing those from Intel Corp.

Apple plans to replace a Wi-Fi and Bluetooth chip from Broadcom with an in-house design, according to the Bloomberg report. Apple did not respond to a Reuters request for comment.

Shares of Broadcom ended 2 percewnt lower. Apple accounts for about 20 percent of Broadcom’s revenue.

Apple’s decision to phase out the Wi-Fi and Bluetooth chip is likely to hit Broadcom’s revenue by about $1 billion to $1.5 billion, said Stacy Rasgon, an analyst with financial services firm AB Bernstein. He, however, added that Broadcom’s radio frequency, or RF, chips were complex to design and manufacture and were unlikely to be replaced in the short term.

Apple is also looking to swap out Qualcomm Inc’s cellular modem chips with its own by the end of 2024 or early 2025, according to the report.

Qualcomm has already said it believes Apple will phase out its chips. Apple uses Qualcomm’s Snapdragon X65 in its iPhone 14 line and is expected to deploy a newer version of the same chip in the iPhone 15 models expected to be released later this year, according to Jefferies’ analyst William Yang.

Broadcom and Qualcomm did not immediately reply to Reuters’ requests for comments.