Apple Is Collaborating With Broadcom To Develop Its First AI-Focused Server Chip -- It Will Be Here Before We Know It -- January 5, 2025

Locator: 44623AAPL.

I spend a lot of time following RBN Energy to keep up with the nuances in the US oil and gas sector. I'm beginning to wonder, as an investor, if that's my best use of time. Look at what I missed. It was only because a reader wrote to tell that Intel is no longer paying a dividend that I stumbled across this.

Intel's dividend and this story have absolutely no relationship; there are no dots to connect, but on the internet, when surfing, it's amazing what one may come across. In this case, Baltra.

Go to MacRumors and do a word search on that site: Baltra. 

Tonight? Nada.

But look at what others are reporting.

And look who, when where --

Arizona, TSMC, Broadcom (AVGO), Apple.

Tim Cook playing the long game. 

Let's take a look at the India Magazine report:

Apple is collaborating with Broadcom to develop its first AI-focused server chip, a move aimed at preparing to address the intense computing demands of its AI features.

The chip, internally code-named “Baltra”, is projected to enter mass production by 2026. The initiative mirrors strategies employed by other tech giants like Google, Amazon, and Meta, which have designed custom chips to support AI services. 

The collaboration highlights Apple’s strategic effort to reduce dependence on NVIDIA, which dominates the AI chip market. The chip will reportedly use Broadcom’s networking technology to optimise AI processing and employ advanced manufacturing processes from TSMC. What’s in for Apple? 

Broadcom shares rose by five percent following the announcement, reflecting the company’s growing role in AI chip manufacturing. 

TSMC’s advanced N3P fabrication process is reported to be used for Baltra. Apple and Broadcom declined to comment on the report. 

Apple’s in-house silicon team in Israel is leading the project, focusing on a chiplet design that improves efficiency and reduces complexity. The design incorporates Apple’s Neural Engine technology to enhance AI task performance. 

This initiative aligns with Apple’s recent AI advancements, including features that generate text, create images, and summarise content. While Apple’s current chips power some AI features, they are not as efficient as chips designed specifically for AI processing. 

Broadcom, which has also partnered with Google on AI chips, will provide networking technology but allow Apple to retain control over the chip’s overall design and production. 

Growth by Partnerships.

This partnership also builds on an existing multi-billion-dollar deal between Apple and Broadcom to produce 5G radio frequency components, announced last year. Apple previously shared plans to integrate its own server chips to power AI features on its devices.

This is an incredible story and confirms what I've been saying for the past year, if not the past two years. Time flies.Wow, if this doesn't help me with my investment decisions, I don't know what would.

Not stated above: Apple may also have the best AI server already in service. 

Now, the Baltra chip. 

AAPL: $3.9 trillion market cap. P/E: 40. Forward P/E: 32.68.

AVGO: $1.1 trillion market cap. P/E: 180. Forward P/E: 36.63.

See this post, also.

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• See disclaimer. This is not an investment site. 
• Disclaimer: this is not an investment site. Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here. All my posts are done quickly: there will be content and typographical errors. If something appears wrong, it probably is. Feel free to fact check everything.
  
• If anything on any of my posts is important to you, go to the source. If/when I find typographical / content errors, I will correct them. 
• Reminder: I am inappropriately exuberant about the Bakken, US economy, and the US market.
• I am also inappropriately exuberant about all things Apple. 
• And now, Nvidia, also. I am also inappropriately exuberant about all things Nvidia. Nvidia is a metonym for AI and/or the sixth industrial revolution.
• I've now added Broadcom to the disclaimer. I am also inappropriately exuberant about all things Broadcom.
  
• Longer version here.