Intel and Apple strike historic preliminary chip-making deal to diversify supply

In a move that could reshape the global semiconductor landscape, Intel and Apple have reached a preliminary agreement for Intel to manufacture custom chips for Apple devices. The news, first reported by the Wall Street Journal, sent Intel shares soaring nearly 15% to record highs as investors cheered the return of a partnership that ended six years ago.

The deal marks a significant shift in Apple’s supply chain strategy, ending its exclusive reliance on Taiwan Semiconductor Manufacturing Co. (TSMC) for its advanced silicon.

Washington’s "invisible hand" in the deal

The agreement follows more than a year of intensive negotiations reportedly facilitated by the U.S. government. Last summer, the federal government converted approximately $9 billion in grants into a 10% equity stake in Intel, a move that effectively made the U.S. government Intel’s largest shareholder. Commerce Secretary Howard Lutnick and President Trump personally participated in the effort to bring Apple to the table, pitching Intel as a vital domestic alternative to overseas fabrication.

For Apple, the deal provides a much-needed "Plan B" as TSMC’s capacity remains heavily constrained by the explosive demand for AI chips from rivals like Nvidia.

The technical edge: Intel 18A and 14A

While neither company has confirmed which specific chips Intel will produce, industry analysts point to Intel’s upcoming 18A (1.8nm-class) and 14A nodes as the likely candidates.

• Diversification: Apple CEO Tim Cook recently noted that supply constraints at TSMC have impacted iPhone and Mac shipments.

• Validation: Landing Apple, notoriously the most demanding customer in tech, serves as the ultimate "seal of approval" for Intel’s Foundry Services.

• The foundry race: Intel is now positioned as a legitimate competitor to TSMC and Samsung, joining a client roster that already includes Microsoft, Amazon, and Tesla.

Market reaction and the road ahead

The market response was immediate. Intel’s stock surged from $110 to roughly $125 in a single session, adding billions to its market capitalization. However, the deal remains "preliminary." Intel must now prove it can meet Apple's exacting standards for volume and yield.

If successful, the first Intel-made Apple chips could begin appearing in devices as early as 2027, representing a major victory for the U.S. push toward domestic semiconductor self-sufficiency.