Apple Inc (NASDAQ:AAPL, XETRA:APC) announced a new multiyear agreement with Broadcom Inc (NASDAQ:AVGO, XETRA:1YD) valued at more than $30 billion to design and manufacture custom silicon components and wireless connectivity technologies in the United States, marking the company's largest commitment under its American Manufacturing Program.
The agreement is expected to result in the production of more than 15 billion chips in the US and includes a $1.5 billion expansion and modernization of Broadcom's manufacturing facility in Fort Collins, Colorado. Apple said the investment will support hundreds of US jobs.
Under the agreement, Broadcom will manufacture advanced radio frequency components, including FBAR filters, as well as wireless connectivity technologies used in Apple products.
Apple said the deal advances its efforts to build a domestic silicon supply chain and forms part of its broader pledge to invest $600 billion in the US economy over four years through manufacturing, job creation and technology development.
"Apple and Broadcom have a long history together, and this new phase of our partnership further accelerates our commitment to American manufacturing and innovation," Apple CEO Tim Cook said in a statement.
"The cutting-edge components built in Fort Collins are essential to delivering the incredible performance and connectivity our customers expect."
Broadcom President and CEO Hock Tan said the company was pleased to expand its manufacturing footprint in Fort Collins as part of its long-standing relationship with Apple.
Broadcom has supplied Apple with connectivity components for years. Apple said the expanded partnership will focus on producing custom silicon and wireless components used to enable cellular, Wi-Fi and Bluetooth connectivity across its devices.
The company did not disclose when the additional manufacturing capacity is expected to become operational.
Shares of Apple opened flat at about $310, while Broadcom shares added more than 2% at $379.