Apple's chip development has made new progress, and as early as next year, we may see iPhones supported by Apple's self-developed Wi-Fi chips.

On Thursday, December 12, Eastern Time, Bloomberg reported that Apple is close to replacing Broadcom products with its self-developed chips in the iPhone and its home products, as insiders revealed that Apple has spent several years developing a self-developed chip codenamed Proxima, with ambitious plans to use this chip in new products starting next year, replacing the current Wi-Fi/Bluetooth chips supplied by Broadcom.

The report stated that Apple will launch the aforementioned self-developed chip combining Wi-Fi and Bluetooth next year for newly released home devices, including the new version of the Apple Television Set-Top Box and HomePod mini Smart Speaker. Apple also plans to use this chip in the new generation of iPhones later next year and in iPads and Macs in 2026, the year after next.

Insiders said that the implementation of the Proxima chip marks a significant breakthrough by Apple's hardware technology department led by Senior Vice President Johny Srouji. Like other self-developed chips from Apple, this chip is also produced by Taiwan Semiconductor, but details about its Technical Indicator were not disclosed. Insiders also stated that Apple's goal is to develop an end-to-end wireless solution that allows this wireless component to be tightly integrated with other components and to be more energy-efficient.

A representative from Apple declined to comment on the above report. If the information is accurate, it means that Apple will have control over how hardware devices connect to cellular networks and Wi-Fi hubs, entering a field long dominated by chip manufacturers. This should allow Apple to better control the user experience and pave the way for new device formats such as thinner iPhones and wearable technology.

This is undoubtedly bad news for Broadcom. Apple is Broadcom's largest customer, accounting for 20% of Broadcom's revenue in the fiscal years 2022 and 2023. Broadcom is the biggest supplier of Apple's Wi-Fi/Bluetooth chips. Apple's self-developed chip replacement would mean Broadcom loses a large customer and its Orders.

After the news broke, on Thursday afternoon, Apple's stock price increased further, reaching an intraday high with a 0.9% rise. Broadcom, on the other hand, saw its losses expand rapidly, hitting an intraday low with a drop of over 3.9%, but later narrowed the decline to under 2%, ultimately closing down about 1.4%, falling from the closing high of over 6% rebound created on Wednesday since November 8. After hours, Broadcom reported its fourth quarter EPS profits exceeded expectations, with annual AI revenue growth of 220% to 12.2 billion dollars, reflecting strong demand for AI processors and networking components, causing Broadcom's stock price to surge after hours, rising over 15% at one point.

In fact, rumors about Apple planning to replace Broadcom chips emerged early last year. At that time, Wall Street Insight mentioned that media reports suggested the goal was to stop using Broadcom chip components by 2025, shifting to self-developed WiFi/Bluetooth chips. It was also noted that Apple was working to integrate the modem, WiFi chip, and Bluetooth components, aiming to replace Qualcomm's modem chip as early as the end of 2024 to early 2025.

At the end of October this year, Apple's 'prophet,' Analyst Ming-Chi Kuo from Tianfeng International Securities, revealed on Social Media X that Broadcom currently supplies Apple with 0.3 billion Wi-Fi chips annually, and Apple may reduce its reliance on Broadcom chips next year by launching self-developed chips. The new products to be released in the second half of next year, such as the iPhone 17, will use Apple's self-developed chips, manufactured using Taiwan Semiconductor's 7nm process, supporting the latest Wi-Fi 7 specifications.

Last week, media reports indicated that Apple would release a self-developed modem system, which had been in development for over five years, in spring next year. This system will be first used in Apple's new generation entry-level Smart Phone iPhone SE, which is set to receive its first update since 2022, replacing the cellular modem chips from long-time partner Qualcomm. Bloomberg's report on Thursday mentioned that Apple's transition to its own cellular modem chip is unrelated to the replacement of Broadcom's WiFi/Bluetooth chips; however, the two components will ultimately work together.

Editor/Jeffy