The company has signed a multi-billion dollar long term deal with Broadcom to develop its own brand of chips in its home country
Looks like economic nationalism is catching on globally! At a time when we’re hearing more and more Make-in-India stories, news is just coming that Apple, which was among the first to shift its contract manufacturing to Indian shores, is now joining hands with Broadcom to develop microchips made in the United States.
Of course, the reasons are obviously revolving around Apple’s stated policy of expanding its supply chain beyond China – one that got it into trouble during the Covid-19 pandemic. The company has announced a multi-billion dollar long-term deal with Broadcom under which it proposes to develop 5G radio frequency components.
In a statement, Apple said the company is partnering with Broadcom to develop FBAR filters, and cutting-edge wireless connectivity components, with the FBAR filters designed and made in several sites in the US, including Broadcom’s facility in Fort Collins, Colorado. The statement did not specify the exact time frame and investment.
Is Cook lending a helping hand to the US?
Apple CEO Tim Cook reminded us that all of Apple’s products depended on technology engineered and built in the United States, which then was transferred to other locations as part of their contract manufacturing program. In the statement, Cook said Apple will continue to deepen investments in the US economy because of its unshakable belief in America’s future.
Of course, that doesn’t mean Apple or Tim Cook do not believe in other economies. When he was in India last month to launch Apple’s first couple of branded stores in the country, Cook had actually singled out India as pivotal to the company’s plans as the world’s most populous country was on the cusp of becoming a major market and production base.
FBAR filters and connectivity components
Coming back to the deal with Broadcom, the statement said Apple was committed to develop 5G technology and had announced its commitment (in 2021) to invest $430 billion over five years. This actually resulted in a huge boost to the expansion of 5G services in the United States and a faster adoption of the technology.
The company also highlighted that its diversification plans, which included shifting contract manufacture from China to India and other countries in Southeast Asia, would also witness a reduced reliance on chipsets made in Asia. Apple is looking to source more TSMC chips made in Arizona, the statement said.
By the look of things, Cook also seems to be doing his bit for the Democrats who have been pilloried for job losses and recession in the United States. By shifting some of their technology prowess and apportioning a part of their massive cash reserves, probably the Apple CEO is giving something for President Joe Biden to tom-tom.
As for Broadcom, it has been among Apple’s top-200 suppliers for several years now with the two having a three-year $15 billion agreement that expires in June. The latest deal would help remove any uncertainties about their continued partnership. What remains to be seen is the list of products Apple will use the FBAR filters for.
There have been reports that these could be used in Apple Watches, iPhones, iPad and the rumored mixed reality device that adopts filters. Of course, there were some concerns whether this deal would impact Apple’s association with Qualcomm, but analysts believe that they are on different sides of the components spectrum for Apple.
Of course, one thing is sure. Tim Cook does believe in keeping his apples in different baskets (pun intended).