According to sources familiar with the situation, Bloomberg News reported on Monday that Apple Inc. wants to switch out a Broadcom Inc. processor from its products with an internal design in 2025.
The manufacturer of the iPhone has been seeking to reduce its dependency on other chipmakers, and for recent generations of its Mac computers, it switched to its own line of CPUs, replacing those from Intel Corp.
The Wi-Fi and Bluetooth chip from Broadcom will be replaced by Apple, according to a report from Bloomberg News, which also noted that Apple is the company's biggest client.
About 20% of Broadcom's sales comes from the Cupertino, California, corporation.
According to Stacy Rasgon, an analyst with the financial services company AB Bernstein, Apple's choice will probably reduce Broadcom revenue by between $1 billion and $1.5 billion.
However, he went on to point out that Broadcom's radio frequency, or RF, chips were difficult to manufacture and were not likely to be replaced anytime soon.
Broadcom's stock ended the day down 2%.
A Reuters request for comments was not immediately answered by Apple or Broadcom.
According to the source, Apple intends to replace Qualcomm Inc.'s cellular modem chips with its own by the end of 2024 or the beginning of 2025.
According to Qualcomm, Apple will gradually stop using its chips. According to William Yang, an analyst at Jefferies, Apple employs Qualcomm's X65 as its 5G modem in its iPhone 14 line and is anticipated to use an upgraded version of the same chip in its next iPhone 15 models.
A Qualcomm representative cited the company's announcement from November, in which it was said that it anticipated "little contribution from Apple product revenue in fiscal '25."
