Apple Inc (NASDAQ:AAPL, ETR:APC) is partnering with Broadcom Inc (NASDAQ:AVGO, ETR:1YD) to develop its first server chip designed for AI processing, according to a report from The Information.
The report, which cited people with knowledge of the matter, said Apple’s AI chip is expected to be ready for mass production by 2026.
To make the chip, code-named Baltra internally, Apple plans to use one of Taiwan Semiconductor Manufacturing Co (ADR) (NYSE:TSM)’s advanced manufacturing processes called N3P.
The iPhone maker like many other technology companies including Google, Amazon, Microsoft and Meta have opted to develop its own AI chips rather than rely on third party suppliers like Nvidia.
Wedbush analysts view the news as a modest positive for Broadcom and TSMC.
“The Information suggests that while an Apple team is developing the server accelerator, that Broadcom is providing the interconnect technology that will be used to cluster the TSMC built chips, which will be used to support inference requests from Apple edge devices (iPhones, Macs, etc.),” they wrote.
“We see this news as a modest positive for Broadcom and TSMC though arguably the speculated design wins only reinforce their respective market leadership in networking and advanced chip production.”
After initially rising on the news, shares of Broadcom fell 2.3% to $179 on Thursday morning, while Apple stock added 0.8% at about $248.