Broadcom, a supplier of a broad range of wireless semiconductor products, has confirmed two multi-year deals to supply wireless components to Apple. These agreements ‘2020 SOWs’, are an addition to a similar agreement (2019 SOWs) announced last June and will further extend Broadcom’s reach into the Apple supply chain. According to Broadcom, these three agreements could generate around $15 billion in revenue over three-and-a-half-years.
Apple will use these high-performance RF front-end wireless components and modules in their smartphones, tablets, and watches.
Last year, during Broadcom’s fourth-quarter earnings call on December 10, 2019, CEO Hock Tan stated ‘the wireless business could be sold’, following which The Wall Street Journal reported that Broadcom was looking for $10 Billion for this business. So Apple’s deal could revive Broadcom’s wireless segment or alternatively could help Broadcom get a higher price from an acquirer in the near future.
Broadcom is a leading semiconductor component supplier, providing radio-frequency chips that help iPhones, iPads and Apple Watches connect to cellular data networks. Broadcom has also supplied other components to Apple, including chips for connecting devices to Wi-Fi networks.
