AAPL Apple Inc

By Tripp Mickle and Kimberly Chin 

Broadcom Inc. said it reached multiyear supply agreements with Apple Inc. to provide wireless components for Apple products into 2023, deals that could generate billions of dollars worth of business.

The three-and-a-half-year agreements, in addition to an agreement last year to supply Apple with radio-frequency units, will deliver $15 billion in revenue to Broadcom, the California-based chip maker said Thursday.

The supply agreements give Broadcom -- which sells Bluetooth, RF and Wi-Fi components for mobile handsets among other products -- contractual guarantees from Apple and will remain a customer in the years ahead. It is an important assurance at a time when Apple is increasingly opting to design chips it once purchased from suppliers.

Apple accounted for roughly 20% of Broadcom's net revenue in the year ended Nov. 3, and about 25% of revenue in fiscal 2018.

Shares in Broadcom rose 3.1% to $329.34 in after-hours trading Thursday. The stock closed up 2.2% in the regular session.

Broadcom is working with Credit Suisse Group AG to find a buyer for its radio-frequency business, The Wall Street Journal reported in December, citing people familiar with the matter. The business, which generated $2.2 billion in revenue in fiscal 2019, is expected to fetch as much as $10 billion.

Broadcom's RF unit is a market leader in so-called FBARs -- film bulk acoustic resonators -- that are used in cellphones and base stations to filter out unwanted radio transmissions.

New radio-frequency chips are considered crucial to getting the best possible performance out of the latest phones for the 5G wireless technology communications standard. Qorvo Inc. and other companies such as Qualcomm Inc. and Skyworks Solutions Inc. have won spots in new 5G phones from Samsung Electronics Co., Huawei Technologies Co. and LG Electronics Inc. Apple is expected to launch its first 5G smartphones later this year.

Broadcom, historically known for semiconductors that go into cellphones and networking equipment, has increasingly pushed into software through acquisitions of CA Technologies Inc. in 2018 and a deal with Symantec Corp.'s corporate-focused security business last year.

Write to Tripp Mickle at Tripp.Mickle@wsj.com and Kimberly Chin at kimberly.chin@wsj.com

(END) Dow Jones Newswires

January 23, 2020 18:40 ET (23:40 GMT)

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