Apple Inc. is reportedly teaming up with Broadcom to develop its first server chip dedicated to artificial intelligence (AI) processing, according to a report by The Information. The move signals Apple's alignment with other major technology companies that are designing their own chips to support compute-intensive AI tasks and reduce dependency on Nvidia's high-cost, high-demand processors.
The AI chip, internally referred to as "Baltra," is expected to be ready for mass production by 2026. Apple is planning to leverage one of Taiwan Semiconductor Manufacturing Co.'s (TSMC) advanced manufacturing technologies, known as N3P, to produce the chip, the report added.
Both Apple and Broadcom have yet to respond to requests for comment on the development. Following the news, Broadcom shares rose by 5%.
This collaboration comes after a multi-billion-dollar agreement between Apple and Broadcom last year to develop 5G radio frequency components. At its annual developer conference in June, Apple had revealed plans to use in-house server chips to power AI features across its devices.
Apple has demonstrated significant success in developing proprietary chips, including the M-series processors that replaced Intel chips in its MacBook lineup. However, despite such advancements, many major tech companies continue to face challenges in fully moving away from Nvidia's processors—Google being a notable exception. Google also works with Broadcom for its AI chip needs.
The ongoing efforts of cloud service providers to diversify their supply chains have positioned Broadcom as a key beneficiary of the growing AI industry. Broadcom's shares have surged 54% in 2024, following a near doubling in value last year.
Broadcom faces stiff competition in this space from Marvell Technology. According to Marvell’s Chief Operations Officer Chris Koopmans, the custom chip market could reach $45 billion by 2028, with Broadcom and Marvell poised to capture significant portions of this growth.
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