Apple, Broadcom Expand Custom Chip Partnership | Bloomberg Tech 7/06/2026

Multi-year deal extends through 2031

Apple and Broadcom signed a new agreement for Broadcom to develop custom chips for multiple generations of Apple products, specifically focusing on AI server infrastructure.

Custom ASIC for AI server processing

Broadcom will provide technology for Apple's first server-specific chip, an ASIC designed exclusively for AI processing using single-purpose silicon architecture.

M5 Ultra variant with 4x performance boost

The partnership will produce a version of Apple's upcoming M5 Ultra chip featuring 4x performance improvements on both GPU and CPU sides for data center applications.

Strategic pivot from wireless to servers

Broadcom had been phased out of Wi-Fi and Bluetooth chip production for iPhones as Apple moved to in-house designs, making this server partnership a critical return to Apple's supply chain.

$28 billion US debut via ADRs

SK Hynix is launching the largest foreign share sale in US markets, offering 18 million American Depositary Receipts to raise capital for high-bandwidth memory capacity expansion.

$7 billion in cornerstone investor demand

The listing has attracted approximately $7 billion in demand from cornerstone investors who have committed to prop up the deal ahead of formal marketing.

One-way conversion structure creates premium risk

Investors can convert ADRs into South Korean shares but not vice versa, similar to TSMC's structure, which has led to US shares trading at significant premiums to Asian-listed shares.

Rotation debate: semiconductors vs. hyperscalers

Analysts disagree on whether capital will rotate out of semiconductor stocks into hyperscalers, with Morgan Stanley warning of potential 30% corrections in chip stocks while RBC views recent pullbacks as healthy consolidation.

20% workforce reduction impacts 3,200 employees

Microsoft is cutting nearly one-fifth of Xbox staff and divesting four development studios, with a fifth planned, as part of a major organizational reset.

Game Pass subscription growth plateaued

Despite the $69 billion Activision Blizzard acquisition and heavy investment in content, Microsoft's gaming subscription service has failed to grow as projected.

Hardware-software strategy underperforming

Xbox has struggled to match Nintendo's model of driving hardware sales through exclusive software, leading to lagging console performance compared to competitors.

$300 million international investment

The AI video generation company is investing nearly $300 million over the next few years to establish new hubs in London, Tokyo, and Paris.

Hollywood studio adoption accelerating

Runway reports that AI content creation has shifted from experimental to standard practice, with studios like Lionsgate taking equity stakes and co-developing projects.

Research and commercial teams driving growth

The expansion focuses on hiring research talent and go-to-market teams in regions where the company sees natural demand, with Europe as the second-largest market and Japan as third.