Apple and Intel have reached a preliminary agreement for Intel to manufacture some of the chips that power Apple devices, in what analysts are calling the most significant US semiconductor deal since the CHIPS Act. Intensive talks between the two companies lasted more than a year, with the White House — and President Trump personally — advocating for the partnership as part of a broader push to reshore chip manufacturing.
Deal Structure
While specific chip products haven't been disclosed, reports indicate Intel will focus on entry-level A-series and M-series processors. The M7 chip, expected in MacBook Pro, MacBook Air, and iPad Pro by late 2027, and the A21 for the 2027 iPhone, are likely candidates. For Apple, the deal reduces concentration risk with TSMC, which is currently its sole silicon manufacturer.
Why Apple Needs Diversification
During Apple's latest earnings call, CEO Tim Cook acknowledged that iPhone 17 models were supply-constrained because Apple couldn't secure enough A19 and A19 Pro chips from TSMC. With Taiwan geopolitical risk remaining elevated and TSMC capacity stretched thin by surging AI chip demand, diversifying to Intel's US fabs makes strategic sense even if Intel's process technology lags TSMC's leading edge.
Intel's Foundry Pivot Validated
For Intel, the Apple deal validates its foundry strategy — the bet that the company can transform from a pure chipmaker into a contract manufacturer for other companies. Intel invested $5 billion in the partnership and the Apple agreement could bring $3-5 billion in annual revenue by 2028. Combined with Nvidia's $5 billion equity stake and Tesla's Terafab deal, Intel's foundry pipeline is filling rapidly.
Market Impact
Intel shares surged 19% over two trading days since the Wall Street Journal first reported the deal Thursday, adding $40 billion in market capitalization. Apple gained 1.7%. TSMC ADRs fell 2.1% on concerns about losing exclusivity with Apple. The deal sent ripples through the broader semiconductor supply chain, with GlobalFoundries up 5% and Samsung Foundry discussing its own client wins.