Apple and Broadcom to Develop AI Chip, Production by 2026

According to reports, Apple is working with Broadcom to develop its first AI-focused server processor, codenamed "Baltra," which is expected to enter mass production by the end of 2026.

The new AI server chip will feature a Chiplet design, where different functions of the processor are handled by several smaller chips. These chips will then be integrated into a single unit using advanced packaging technology. This approach reduces manufacturing complexity and costs while ensuring that Apple's overall chip design remains confidential, making it difficult for even its partners to fully understand the design.

The "Baltra" processor will primarily feature a computing core designed by Apple. Its CPU is likely based on the ARM instruction set architecture, with key AI cores developed in-house for inference tasks. Apple is expected to outsource the chip's production to TSMC, possibly using the latest N3P process technology. Broadcom's role will be limited to providing a "chiplet" for the processor.

Julian Lin, head of the Best Of Breed Growth Stocks investment team, noted that Broadcom's benefits from this collaboration will be limited, as Apple typically prefers to rely on its own technology.

It is unclear why Apple has partnered with Broadcom while developing its in-house AI server chip. However, given that AI servers require multiple processors to work together, Broadcom may be responsible for handling the connections between these processors.

Following the news, Broadcom's stock price saw a significant increase of 6.63%, closing at $183.20 per share on December 11, marking the highest closing since November 8.