Summary
Broadcom Inc. (AVGO) announced a significant two-year supply agreement with Apple Inc., effective June 9, 2019. This arrangement positions Broadcom as a key supplier of radio-frequency (RF) front-end components and modules for various Apple devices, including smartphones, tablets, and watches. The agreement mandates Broadcom to allocate sufficient manufacturing capacity and resources to meet Apple's needs for these specific components under new programs. While Apple intends to source all its requirements for these RF components from Broadcom, this commitment is contingent upon Broadcom's ability to meet defined development, supply, and quality standards. The agreement also outlines specific pricing structures and methodologies for the supplied products, providing a degree of revenue predictability for Broadcom from this major customer over the next two years.
Key Highlights
- 1Broadcom Inc. entered into a two-year supply agreement with Apple Inc. on June 9, 2019.
- 2The agreement covers radio-frequency (RF) front-end components and modules.
- 3These components are designated for Apple's smartphones, tablets, and watches.
- 4Broadcom commits to maintaining sufficient manufacturing capacity and resources for these products.
- 5Apple intends to source all its requirements for the specified RF components from Broadcom, subject to meeting commitments.
- 6The agreement includes specific pricing schedules and methodologies for the supplied products.