Tech News: Apple to Partner with Broadcom to Develop AI Server Chip, Set for 2026 Mass Production

Apple is reportedly collaborating with Broadcom to develop its first AI-dedicated server processor, code-named "Baltra," with plans for mass production by the end of 2026. This move signifies Apple's continued expansion into the AI hardware market, aiming to create a powerful and efficient processor tailored for artificial intelligence workloads.

The Baltra chip will incorporate a Chiplet design, where the processor's various functions will be handled by multiple smaller chips. These individual chiplets will then be integrated into a single, unified chip using advanced packaging technology. This design approach offers several advantages, including reducing the complexity of the manufacturing process, lowering production costs, and maintaining greater confidentiality in Apple's overall chip architecture. Even Apple’s partners will have limited insight into the full design, enhancing the security of its proprietary technologies.

Notably, while the main computing core of "Baltra" will be designed by Apple, the CPU is expected to be based on the Arm architecture. Apple will also develop the key AI cores, focusing on AI inference tasks. The company is likely to outsource the production of these chips to TSMC , possibly leveraging the latest N3P process technology for optimal performance and efficiency. Broadcom’s role in this collaboration will be to supply a small chip (chiplet) for the processor.

Although Apple’s partnership with Broadcom has drawn attention, experts like Julian Lin, head of the Best Of Breed Growth Stocks investment team, suggest that Broadcom’s benefits from this deal may be limited. Apple has a history of preferring in-house technologies, which could restrict Broadcom’s involvement in the overall project.

The reason for Apple’s collaboration with Broadcom on the Baltra chip, despite its strong in-house capabilities, remains unclear. However, AI servers often require multiple processors to work in tandem, and Broadcom could be responsible for managing the connections between these processors, ensuring smooth communication and performance.

Following this news, Broadcom’s stock surged by 6.63%, closing at $183.20 per share on December 11, marking the highest closing price since November 8, 2024. This strong market reaction underscores the interest surrounding Apple’s move into AI hardware and Broadcom’s role in the development of the Baltra chip.

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