Apple and Intel Reach Preliminary Chip Manufacturing Agreement

Apple and Intel have reached a preliminary agreement for Intel to manufacture some of the chips used in Apple’s hardware products [1]. The deal follows more than a year of negotiations and represents a significant shift for Apple, which currently relies exclusively on Taiwan Semiconductor Manufacturing Co. (TSMC) for its advanced silicon [2].

Key takeaways

• The agreement follows over a year of talks between the two companies and was finalized in recent months [2].
• President Donald Trump reportedly played a personal role in the negotiations, advocating for the partnership during a meeting with Apple CEO Tim Cook [2].
• While the specific products remain undisclosed, analysts suggest Apple may wait to utilize Intel’s 18A-P production process, potentially starting as early as next year [1].
• The move serves as a strategy for Apple to diversify its supply chain amid high demand for AI-capable semiconductors [4].

A Strategic Shift in Silicon Production

For years, Apple has depended on TSMC to produce the core chips for its iPhones, Macs, and iPads [1]. However, the surge in demand for AI-related hardware has strained global wafer capacity, prompting Apple to seek alternative manufacturing sources [1]. While it is currently unclear which specific devices will feature Intel-made chips, industry analysts have previously speculated that the partnership could eventually extend to M-series chips for Macs and iPads, and potentially iPhone processors by 2028 [2].

Intel’s foundry business, which has faced historical challenges with yields and delays, is positioning itself as a viable second source for high-end manufacturing [1]. The company is currently scaling its 18A production node at a fabrication plant in Chandler, Arizona, which is intended to compete with TSMC’s 2nm process [1]. Experts suggest that Apple may wait for the refined 18A-P node, which is expected to offer improved performance and stability [1].

Government Involvement and Market Impact

The deal arrives as the U.S. government takes an active interest in Intel’s domestic manufacturing capabilities. The Trump administration acquired a 10% stake in Intel last year, and Commerce Secretary Howard Lutnick has reportedly held meetings with leaders from Apple, Nvidia, and SpaceX to encourage partnerships with the chipmaker [3]. President Trump has publicly stated that his administration’s involvement was a catalyst for these corporate agreements [3].

The news of the preliminary deal had an immediate effect on the markets, with Intel shares rising nearly 14% and Apple shares adding 2% on Friday [1]. Despite the potential for a new partnership, industry observers note that the move is unlikely to immediately impact TSMC, as the foundry is already operating at maximum capacity [1]. TSMC leadership has recently acknowledged Intel as a "formidable competitor," a shift in rhetoric that analysts attribute to the changing landscape of the semiconductor industry [1].