Key Points
- Apple and Intel reach preliminary agreement for US-based chip manufacturing
- Intel shares rose over 14 per cent following the report
- Deal would reduce Apple's reliance on Taiwan's TSMC for processor fabrication
Apple has reached a preliminary agreement with Intel to manufacture some of its device processors in the United States, the Wall Street Journal reported on Friday, marking a significant step in the iPhone maker’s effort to diversify its semiconductor supply chain beyond Taiwan Semiconductor Manufacturing Co.
The agreement, reached in recent months after more than a year of discussions, could provide Apple with a stronger US-based production option while offering Intel a major validation point for its struggling foundry business. It remains unclear which Apple products would use Intel-made chips.
By the numbers
- 14%
- Intel share price gain following report
- 2%
- Apple share price increase after news
- 1 year
- Duration of Apple-Intel discussions
Supply chain diversification
Apple designs the processors used in iPhones, iPads and Macs but relies on contract manufacturers to fabricate them. TSMC has been Apple’s primary chip manufacturing partner for more than a decade, particularly for the advanced process nodes used in its latest devices.
The reported deal follows a Bloomberg report earlier this week that Apple had held exploratory discussions with Intel and Samsung Electronics on producing main device processors in the United States. Apple executives also visited a Samsung chip plant under development in Texas as the company assessed options beyond TSMC, Bloomberg had reported.
A manufacturing arrangement with Intel, even if limited initially, would reduce Apple’s dependence on a single supplier and provide flexibility during periods of capacity pressure. Apple is already working with TSMC on US production in Arizona, though that facility is expected to cover only a portion of its overall chip requirements.
Intel’s foundry ambitions
For Intel, an Apple mandate would be strategically important even if it begins with selected products or lower volumes. The company has invested heavily in advanced manufacturing and foundry services, but has struggled to attract major external customers and compete with TSMC.
Intel chief executive Lip-Bu Tan has been working to bring in partners as part of a broader turnaround plan for the chipmaker. The Journal reported that US government support for Intel was also a factor in the company’s recent momentum, as Washington has sought to strengthen domestic semiconductor manufacturing.
Advanced chip manufacturing requires scale, yield consistency and process maturity — areas where TSMC remains the global leader. The agreement does not mean Apple will immediately shift large volumes away from its existing partner.
Market reaction
Investors responded positively to the report. Intel shares extended gains and were last up about 14 per cent, while Apple shares rose around 2 per cent, according to Reuters. The Journal separately reported Intel stock rose more than 15 per cent following the news.
The development comes as demand for advanced chips remains elevated due to the growth of artificial intelligence data centres and higher semiconductor requirements across consumer devices, servers and enterprise systems.
Your Questions, Answered
Why is Apple looking beyond TSMC for chip manufacturing?
Apple is seeking to diversify its semiconductor supply chain and reduce dependence on a single supplier. A US-based manufacturing option with Intel would provide flexibility during capacity pressure and align with broader supply chain resilience goals.
What does this deal mean for Intel's foundry business?
An Apple mandate would validate Intel's foundry services and strengthen confidence in its ability to serve external customers. Intel has struggled to compete with TSMC in contract chip manufacturing despite heavy investment.
Which Apple products will use Intel-made chips?
The report did not specify which Apple products would use Intel-made chips. Apple designs processors for iPhones, iPads and Macs, but the scope of the preliminary agreement remains unclear.
Will Apple stop using TSMC for chip manufacturing?
The agreement does not mean Apple will immediately shift large volumes away from TSMC. Apple is also working with TSMC on US production in Arizona, and TSMC remains the global leader in advanced chip manufacturing.
