Apple plans to utilise one of Taiwan Semiconductor Manufacturing’s processes, N3P, for the chip’s fabrication. Credit: Prathmesh T/Shutterstock.

Apple is reportedly collaborating with Broadcom to develop its inaugural server chip specifically intended for artificial intelligence (AI) processing.

This initiative aligns Apple with other technology companies that have developed proprietary chips to power compute-intensive AI services and cut down dependence on NVIDIA‘s costly and limited-supply processors, reported the Information, which cited three people aware of the matter.

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The AI chip, internally named Baltra, is anticipated to be ready for mass production by 2026.

Apple plans to utilise one of Taiwan Semiconductor Manufacturing‘s advanced processes, known as N3P, for the chip’s fabrication.

In 2023, Apple signed a multi-billion-dollar agreement with Broadcom to develop 5G radio frequency components.

At Apple’s annual developer conference in June this year, the company announced plans to use its own server chips to power AI features on its devices, reported Reuters.

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Apple has successfully designed its own in-house chips for its devices, including the M-series processors, which replaced Intel chips in its Mac laptops.

Despite efforts by major tech companies to reduce reliance on Nvidia, challenges remain, except for Google, which also collaborates with Broadcom for its AI chips.

The efforts by leading cloud providers to diversify their supply chains has positioned Broadcom as one of the top beneficiaries of the generative AI surge. The company’s shares have risen by 54% in 2024, building on a nearly twofold increase in value the previous year.

Broadcom’s main competitor in this sector is Marvell.

According to Marvell chief operations officer Chris Koopmans, the market for custom chips could grow to approximately $45bn by 2028, potentially being divided between the two companies.