Broadcom, Apple Expand Custom Chip Partnership

**SPEAKER_2** (0:02)
Bloomberg Audio Studios, podcasts, radio, news. Bloomberg Tech is live from the heart of Silicon Valley with Ed Ludlow in San Francisco.

**Ed Ludlow** (0:22)
This is Bloomberg Tech coming up. Apple bets big on Broadcom for the future, expanding its custom chip partnership through 2031 Plus Microsoft eyes a massive reorganization of its exports unit, with plans to eliminate 20% of its staff over the next year. And SK Hynix begins marketing its US listing, with plans to sell roughly $28 billion in American depository receipts. From New York City this week, welcome to Bloomberg Tech. This is what markets look like. Chip stocks are rebounding. Semiconductor is high today as investors return to the AI trade after last week's sell-off. Betting the spending cycle still has legs. The Philadelphia Semiconductor Index is being led by Broadcom, one of the biggest points contributors. But by the way, AMD is really accelerated into the session, up almost 9% or so.
Our top story is Broadcom. Broadcom isn't just leading the rally, it's also at the center of the biggest news item. The stock is higher after announcing a new agreement with Apple that extends the partnership through 2031 Broadcom will develop custom chips for multiple generations of Apple products. Bloomberg's Consumer Tech and Apple managing editor, Mark Gurman, also here in New York City. Super interesting. There is a historic relationship with Apple and Broadcom we can get to.
To me, reading your report, this might be AI server related. What do we think multiple generations of products means?

**Mark Gurman** (1:44)
You know, when partners to Apple put out these press releases, they're as vague as possible. They're not going to come out and say what it is, but what I'm telling you is that this is specifically for a new server chip that Apple is developing. They're using some Broadcom technology. This is called ASIC chips. An ASIC chip, silicon, is single purpose silicon, right? You're not going to need that for anything really other than a singular functionality, which is processing for AI. And so they're going to be rolling out this chip as early as next year. It's called Baltra within Apple. It's their first server-specific chip. Right now, for the Apple Intelligent servers, they use M2 processors. Those were made for Macs. This is going to be a version of the M5 Ultra, which is going to be their most powerful chip ever, but this is going to have 4X that performance on the GPU and on the CPU side.
This is going to have some Broadcom technology in there.

**Ed Ludlow** (2:39)
You heard it first here on Bloomberg Tech. The stock's like up 4%. At one point, it was up 6% and on track for its best day since February. So on the Broadcom side, investors saying like, this is a big deal for them. What you were just describing, we're probably most familiar with in the context of the TPU, Google's TPU, right?

**Mark Gurman** (2:54)
That's exactly right. They use similar tech.

**Ed Ludlow** (2:56)
So like the history is that Broadcom had a part in the handset on the iPhone side. Is there anything that we know about broadening this relationship to devices away from the server?

**Mark Gurman** (3:06)
Yeah, this is super exciting for Broadcom and Broadcom investors. Obviously, you're seeing the stock, the bump that you mentioned, because Broadcom had been designing combined Wi-Fi plus Bluetooth chips for Apple for a number of years. They've been designed out of the new generations of Apple products. Right now, Apple has their own N1 chip.

**Ed Ludlow** (3:23)
That's right.

**Mark Gurman** (3:24)
They do Wi-Fi plus Bluetooth themselves now. And a lot of the new iPhones, Macs and iPads, Broadcom had been pushed out. Now they're coming back in for AI and for server purposes.

**Ed Ludlow** (3:34)
Bloomberg's Mark Gurman, who leads our coverage of consumer tech and all things Apple. Thank you very much indeed. Today's big number, $28 billion. That's the anticipated value of SK Hynix's US listing, according to a filing with the SEC. The South Korean memory chip maker is looking to sell American depository receipts representing almost 18 million common shares as it kicks off the formal marketing process for its US debut. For more, Bloomberg's Baylor Lipscholz, who leads our coverage of IPOs is here. This is a big one, right? It could be the biggest share sale by a foreign entity in the US, but we have the filing hit this morning. Bring us up to speed on what we need to know.

**Baylor Lipscholz** (4:11)
Yeah, the main things to keep in mind, there is indications of interest for about $7 billion of that demand. So 7 out of 28 already being potentially allocated to the likes of COA2 and others who have again kind of prop this up from a cornerstone perspective. Another thing that investors were closely watching was the fungibility of these ADRs or ADSs. So what that really means is, can you exchange the South Korean listed shares for ADRs and vice versa?