Apple Halts Wi-Fi Chip Development
In recent years, Apple has been working on developing more of its own chips for its hardware products. This includes the A-series and M-series processors, as well as power supply and security management chips. However, it appears that Apple’s plans for developing its own Wi-Fi chip have been halted for the time being.
Many investors have been concerned that Apple’s development of its own Wi-Fi chip would negatively impact Broadcom’s Wi-Fi chip business. However, a recent semiconductor industry survey has indicated that Apple has halted the development of its own Wi-Fi chip for the time being.
This is because developing a Wi-Fi+Bluetooth combo chip is more challenging than just a Wi-Fi-only chip, and most of Apple’s products use the combo chip. Therefore, it would be even more challenging for Apple to replace Broadcom’s combo chips with its own.
In addition, the slowdown of processor upgrades is unfavorable for the sales of end products such as the A16 and M2 series chips. To ensure that the world’s most advanced 3nm processors can enter mass production smoothly in 2023-2025, Apple has devoted most of its IC design resources to the development of processors. This has led to insufficient development resources for the mass production of Apple’s own 5G baseband chip, let alone the Wi-Fi chip with lower strategic value.
In the next 2-3 years, Wi-Fi chips will usher in critical Wi-Fi 6E/7 upgrades, and it would be riskier for Apple to use its own Wi-Fi chips aggressively when the industry standard changes significantly. Therefore, investors should not be worried about Apple’s own Wi-Fi chip affecting Broadcom’s Wi-Fi chip business in the foreseeable future.
Instead, in the next couple of years, Apple and competitors will start adopting Wi-Fi 6E/7 chips with higher ASP, and Broadcom is a leading beneficiary in this trend. Additionally, Broadcom will be the biggest winner from the new iPhone 15’s upgrade to Wi-Fi 6E.