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Kuo: With Apple Halting Development of its own Wi-Fi Chips, Broadcom becomes the winner for the iPhone 15's upgrade to Wi-Fi 6E+

1 Broadcom

Apple analyst Ming-Chi Kuo has tweeted that "Apple has halted developing its own Wi-Fi chips; Broadcom is the biggest winner of the iPhone 15’s upgrade to Wi-Fi 6E and the leading beneficiary of the Wi-Fi industry-standard upgrade to Wi-Fi 6E/7 with higher ASP." Below are Kuo's five key points on the matter:

  • Many investors are concerned that Apple’s work on developing its own Wi-Fi chip will negatively impact Broadcom’s Wi-Fi chip business. However, my latest semiconductor industry survey (foundry, equipment, and packaging and testing) indicates that Apple has halted the development of its own Wi-Fi chip for a while.
  • More specifically, Apple’s previous development for Wi-Fi solution was the Wi-Fi-only chip and not the Wi-Fi+Bluetooth combo chip. From a design standpoint, developing a Wi-Fi+Bluetooth combo chip is more challenging than just a Wi-Fi-only chip. Since most of Apple’s products use the combo chip, it would be even more challenging to replace Broadcom’s combo chips with its own if Apple decides to do so.
  • The slowdown of processor upgrades is unfavorable to the sales of end products (such as A16 and M2 series chips). Therefore, to ensure that the world’s most advanced 3nm processors can enter mass production smoothly in 2023–2025, and the performance upgrade and power consumption improvement can significantly improve vs. predecessors, Apple has devoted most of its IC design resources to the development of processors. Insufficient development resources have delayed the mass production of Apple’s own 5G baseband chip, not to mention the Wi-Fi chip with lower strategic value. In other words, Apple’s own Wi-Fi chip development visibility is even lower than its own 5G baseband chip.
  • In the next 2–3 years, Wi-Fi chips will usher in critical Wi-Fi 6E/7 upgrades. It’s riskier for Apple to use its own Wi-Fi chips aggressively when the industry standard markedly changes.
  • Based on the above, investors should not be worried about Apple’s own Wi-Fi chip affecting Broadcom’s Wi-Fi chip business in the foreseeable future. Instead, in the next couple of years, Apple and competitors will start adopting Wi-Fi 6E/7 chips with higher ASP, and Broadcom is a leading beneficiary in this trend. Also, Broadcom will be the biggest winner from the new iPhone 15’s upgrade to Wi-Fi 6E.


10.X2 - Ming-Chi Kuo Supply Chain News


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