Apple (AAPL) is reportedly developing its own custom microchip for Bluetooth and Wi-Fi connections to be incorporated into its various consumer electronics devices such as the iPhone and iPad.
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Bloomberg News is reporting that Apple plans to begin phasing out some parts that are currently supplied by chipmaker Broadcom (AVGO) early in 2025. The Bluetooth and WiFi chip, code-named “Proxima,” has been under development for several years and is now slated to go into iPhones produced next year.
The iPhone maker’s newest microchips will be produced by Taiwan Semiconductor Manufacturing Co. (TSM). This is the latest example of Apple moving to develop its own proprietary processors. In June of this year, Apple’s management team said that they plan to use their own in-house server chips to power artificial intelligence (AI) features on their devices.
In-House Chips
Apple is also planning to launch a series of cellular modem microchips in 2025 that will replace components it currently sources from longtime partner Qualcomm (QCOM). Apple will reportedly continue working with Broadcom to develop its first server microchip, which is internally code-named “Baltra” and designed for AI models and applications.
The move to design its own processors comes as Apple finds it increasingly difficult to source Nvidia’s (NVDA) expensive and scarce microchips. Other technology companies, including Meta Platforms (META) and Alphabet (GOOGL) have announced plans to develop their own microchips to power AI products.
AAPL stock is up 29% this year.
Is AAPL Stock a Buy?
Apple stock has a consensus Moderate Buy rating among 31 Wall Street analysts. That rating is based on 20 Buy, nine Hold, and two Sell recommendations issued in the last three months. The average AAPL price target of $242.51 implies 2.20% downside risk from current levels.
