Apple announced a multibillion-dollar, multi-year deal with Broadcom for 5G radio components and cutting-edge frequency components.
Among the 5G components, FBAR filters will be designed and built in US manufacturing hubs such as Fort Collins, Colorado, where Broadcom has a facility, Apple said in a statement early Tuesday.
“All of Apple’s products depend on technology engineered and built here in the US and we’ll continue to deepen our investments in the US economy because we have an unshakable belief in America’s future,” Apple CEO Tim Cook added in the statement. “We’re thrilled to make commitments that harness the ingenuity, creativity and innovating spirit of American manufacturing.”
Apple processor chips like the M1 are designed by Apple in the US, of course, but the M1 is built on a 5-nm process by TSMC, based in Taiwan. TSMC is building factories in Arizona for chip fabrication, boosted partly by the expectation of US government support through the CHIPS Act. TSMC and many foreign policy analysts are worried over what will happen with TSMC production in Taiwan should China invade Taiwan.
Apple was already investing $430 billion in the US economy over five years, under a plan announced in 2021. The company said it is “on pace to meet its taerget through direct spend with America suppliers, data center investments, capital expenditures in the US and other domestic spend.”
Apple said it helps support more than 1,100 jobs at the FBAR filer manufacturing facility in Fort Collins. Across the US, Apple said it support 2.7 million jobs through direct employment, developer jobs in the iOS app economy and spending with 9,000 suppliers and manufacturers of all sizes in all 50 states.
Broadcom’s FBAR (Film Bulk Acoustic Resonator) filters are a type of bulk acoustic wave (BAW) filter that have superior performance than surface acoustics wave (SAW) filters, according to Broadcom. They use less current, which saves battery life and improves talk time on phones. Such filters operate by converting electrical energy into acoustic or mechanical energy on a piezoelectric material.
The announcement boosted Broadcom shares by 3% early Tuesday, while Apple’s were down slightly. In 2020, Broadcom had announced it would sell $15 billion in wireless components to Apple.
Apple has relied on Qualcomm for 5G modems but the relationship between Apple and Qualcomm has been on the rocks for years over a patent dispute. Bloomberg reported in January that Apple would begin replacing Qualcomm modem chips used in its iPhone as early as 2024.
The announcement with Broadcom for 5G components shows that Apple, despite its best efforts, "has not yet mastered the ability to produce its own 5G components," noted analyst Jack Gold of J. Gold Associates. The FBAR is a required filter component for an RF front end and highly specialized tech. "While I think Apple wants to bring 5G radio production in house, it is finding that it's not so easy to do," Gold said. Intel got out of the business and sold the tech to Apple severa years ago.
Even though the Broadcom agreement is a good way for Apple to show it is investing in US based component production, the assembly of iPhones is still taking place in the Far East, Gold noted. "While it's good that Apple is buying US made goods, it still ships them to the Far East for assembly and that's a much bigger dollar expense that just buying the components in the US," Gold said. " I don't see production returning to the US in a big way anytime soon."
Gold applauded Apple for its exploration of India for manufacturing as an alternative to the Far East as well.