Apple inks multi-billion-dollar deal with Broadcom for U.S.-made chips

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(Reuters) -Apple Inc on Tuesday said it has entered a multi-billion-dollar deal with chipmaker Broadcom Inc to use chips made in the United States.

Under the multi-year deal, Broadcom will develop 5G radio frequency components with Apple that will be designed and built in several U.S. facilities, including Fort Collins, Colorado, where Broadcom has a major factory, Apple said.

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Broadcom Inc. is an American multinational designer, developer, manufacturer, and global supplier of a wide range of semiconductor and infrastructure software products. Broadcom's product offerings serve the data center, networking, software, broadband, wireless, storage, and industrial markets.

Broadcom shares were up 4.3% in premarket trading after the announcement. The chipmaker is already a major supplier of wireless components to Apple.

Apple said it will tap Broadcom for what are known as film bulk acoustic resonator (FBAR) chips. The FBAR chips are part of a radio-frequency system that helps iPhones and other Apple devices connected to mobile data networks.

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At the same time, Apple is fighting a big battle over back taxes. EU competition regulators appealed to the bloc's highest court on Tuesday to override a lower tribunal and make Apple (AAPL.O) pay a record 13 billion euros ($14.3 billion) in Irish back taxes.

Basically, The European Commission is saying that Apple paid taxes in Ireland on a US rate, when Apple Computer should have been paying taxes in Ireland at an Irish tax rate.

My question is, when it comes to the new Broadcom deal, was this in response to the economy? Just a budget cutting deal? Or was is a more nationalistic move, in response to increasing hostility from China, who owns such a large share of all the imports America uses from Chinese sweatshops?

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For more details on the America-Chinese political battles, click here.

“All of Apple’s products depend on technology engineered and built here in the United States, and we’ll continue to deepen our investments in the U.S. economy because we have an unshakable belief in America’s future," Apple CEO Tim Cook said in a statement.

Apple said it currently supports more than 1,100 jobs in Broadcom’s Fort Collins FBAR filter manufacturing facility.

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