The move by Apple is part of its strategy to diversify its supply chain and reduce reliance on Taiwan Semiconductor Manufacturing Company (TSMC).
On the 18th local time, former US President Donald Trump announced on social media that Intel would partner with Apple to design chips domestically in the United States. Neither company has publicly commented on the announcement yet.
Dan Ives, Managing Director and Senior Analyst at Wedbush Securities, stated in an analysis that this deal represents a "major opportunity" for Intel and is "well-timed" for Apple.
"As Apple is entering a three-to-four-year, AI-driven device upgrade cycle, manufacturing for Apple in the US represents a major opportunity for Intel," he wrote. "With AI chip developers continuously driving up demand for advanced chips, Apple is seeking to diversify its supply chain map and reduce its dependence on its primary overseas supplier, TSMC."
Following the news, chip stocks led the gains on the US market Thursday (18th). Intel shares surged 10.64%. Other semiconductor stocks also rose, with Micron Technology gaining 8.70% and the iShares Semiconductor ETF (SOXX) climbing 6.62%.
Reasons for the Renewed Partnership
The two companies have a long history. Intel's fifth CEO, Paul Otellini, once declined a request to supply processors for the first iPhone due to a low quote, thereby missing the chance to be deeply tied to Apple and the mobile internet wave. Apple subsequently turned to the ARM architecture and partnered with TSMC.
In 2021, after taking over an Intel that had fallen behind in multiple advanced process developments and lost market share to rivals like AMD, then-CEO Pat Gelsinger launched the IDM 2.0 strategy. This involved proposing five technology nodes within four years and revitalizing the foundry business, but it struggled to gain trust from external customers like Apple without proven performance.
Between 2006 and 2020, Apple's Macs primarily used Intel's x86 architecture processors. However, Apple later released its own Apple Silicon (M-series ARM architecture chips) and completed the transition of all Mac products to its own chips by 2023.
Analysts believe the renewed collaboration is closely linked to the rising demand for AI-related chips driven by the AI boom. Since 2016, TSMC has been the exclusive foundry for Apple's A-series and M-series chips, and Apple has been TSMC's largest customer. However, in TSMC's fiscal 2025 financial report released earlier this year, although customer names were not disclosed, revenue share data led external observers to conclude that Nvidia had replaced Apple as its top customer.
"We are now seeing a major reallocation of semiconductor manufacturing capacity—away from consumer electronics and towards AI infrastructure," Ives wrote in the report. "With the arrival of a new AI-driven, multi-year hardware cycle, Apple is now taking steps to secure US-based chip capacity in advance."
Ben Bajarin, Principal Analyst at Creative Strategies, believes that Nvidia becoming TSMC's top customer prompted Apple to reconsider Intel. Additionally, Intel's latest process technology has narrowed the gap with TSMC.
Currently, due to massive AI data center construction and higher-than-expected demand for Macs capable of running AI models locally, Apple faces supply chain pressure. Apple CEO Tim Cook also stated on the 17th local time that the company plans to raise product prices to offset pressure from rising memory and storage chip costs due to increased demand from AI companies.
"While Apple has diversified its supply chain to other global regions including Vietnam, India, and the US, this still indicates Apple is taking strategic steps to continue advancing supply chain diversification to alleviate pressure across its entire production and manufacturing process," Ives wrote.
US Government's Role
To promote the return of chip manufacturing, the previous Trump administration implemented several policies. These included imposing a 25% import tariff on specific advanced computing chips and related products starting in January, citing national security, with a broad exemption list to meet domestic data center construction needs. The administration also "invested" in domestic tech giant Intel and facilitated several large orders.
"I decided to help Intel because we need to design and make our chips right here in the USA," Trump wrote in his post. He also detailed the government's efforts to bring the semiconductor manufacturing chain back to the US, including helping to bring in Nvidia, which agreed to have its Tier 1 chips manufactured by Intel in the US; Elon Musk agreeing to build the world's largest wafer fab, TeraFab, co-designed by Intel's technical team; and "Apple also agreed to work with Intel to design and make its chips in the USA."
In late August last year, the previous administration acquired approximately a 10% stake in Intel, making it the largest shareholder. Trump also noted in his post that Intel's valuation had risen from about $100 billion in August to around $600 billion currently.
However, analysts expect the collaboration may not materialize until 2028 at the earliest.
Bajarin believes it is unlikely Apple will start manufacturing chips with Intel before 2028. Tech companies spend years developing chips and evaluating manufacturers before beginning semiconductor production. This is a complex process taking about 24 months. Apple is expected to partner with Intel for small-volume chip production initially, potentially relying on Intel fabs to manufacture semiconductors for its Macs first, before expanding to iPhone chips.
Analysts also view the partnership with Apple as positive for Intel's business expansion. "Every manufacturer is running at full capacity, and that's not going to change," Bajarin said. "But this is a huge endorsement for Intel from Apple, enough for them to tell other customers, 'If they're going to do it, then I should consider it too.'"
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