Apple and Intel Strike Preliminary Chip Deal

After more than a year of behind the scenes negotiations, Apple and Intel have reached a preliminary agreement that will see Intel manufacture some of the chips powering future Apple devices. The deal, first reported by The Wall Street Journal on Friday, marks a striking reunion between two companies whose split in 2020 reshaped the personal computing landscape.

According to people familiar with the matter, the two firms had been in intensive talks for over a year before formalizing terms in recent months. Bloomberg first surfaced word of the negotiations earlier this week, but the WSJ report confirms that a formal agreement is now in place. Specific terms, including which Apple products will use Intel made silicon, have not been disclosed.

Markets responded immediately. Intel shares jumped nearly 14 percent on Friday, hitting fresh all time highs, while Apple climbed roughly 2 percent. Intel stock is now up more than 200 percent year to date.

A Reunion Years in the Making

For 15 years, Intel manufactured the processors at the heart of every Mac. That partnership ended in 2020 when Apple began transitioning Macs to its own ARM based Apple Silicon, citing performance and efficiency advantages that Intel could no longer deliver. The split was a body blow for Intel, which not only lost billions in annual revenue but watched its former customer prove that ARM designs could outperform x86 in the laptop segment.

The new arrangement is fundamentally different. Intel will not design the chips. Rather, it will act as a foundry, manufacturing silicon based on Apple's own designs, similar to the role TSMC plays today.

Why Apple Wants a Second Source

Apple currently relies on Taiwan Semiconductor Manufacturing Company for all of its most advanced chips. That dependency has become increasingly uncomfortable for several reasons.

First, capacity. TSMC's leading edge wafer supply is stretched thin by surging demand for AI accelerators from companies like Nvidia, AMD, and the major hyperscalers. Outgoing Apple CEO Tim Cook has referenced supply constraints in recent earnings calls, and a second qualified manufacturer would give Apple additional capacity in the years ahead.

Second, geography. TSMC's most advanced fabs sit in Taiwan, a geopolitical flashpoint that has made every major US technology company nervous about concentration risk. Adding a domestic supplier reduces exposure to disruptions in the Taiwan Strait.

Third, optics. Intel is now partly owned by the US government following an investment last year, and the Trump administration has been actively courting deals on Intel's behalf. The WSJ reports that President Trump personally advocated for the partnership in a White House meeting with Cook, and Commerce Secretary Howard Lutnick has been engaging directly with technology executives to steer business toward Intel. For Apple, a deal with Intel buys goodwill in Washington at a moment when tariff and trade policy continue to weigh heavily on its supply chain decisions.

What Intel Brings to the Table

Intel's pitch centers on its 18A process node, the company's first to incorporate two key technologies: RibbonFET gate all around transistors and PowerVia backside power delivery. An enhanced version, called 18A-P, is optimized for mobile and consumer applications and is the variant Apple is reportedly evaluating.

Earlier reporting from analyst Ming-Chi Kuo indicated that Apple has been working with Intel's 18A-P process design kit and that early results have met expectations. Apple is said to be waiting on the version 1.0 release of the PDK, scheduled for the first quarter of 2026, before finalizing production plans. Kuo previously estimated that Apple would allocate 15 to 20 million low end M-series chips per year to Intel, with shipments potentially beginning in the second quarter of 2027.

Analyst Jeff Pu followed up in December with a broader claim: the partnership could eventually extend to iPhone chips, though not before 2028.

Which Chips, and When

Nothing has been confirmed about the specific products Intel will manufacture. Prior reporting suggests the most likely starting point is the entry level M-series chip used in lower priced MacBook Air and iPad models. The higher performing M-series Pro and Max variants would almost certainly remain at TSMC, at least initially.

That split would mirror Apple's broader strategy of diversifying without disrupting its highest performing tiers. The entry level M chips ship in enormous volumes but are less performance sensitive than their Pro counterparts, making them a natural test case for a new foundry partner.

If yields and quality hold up at 18A-P, the partnership could extend further. Some industry analysts have already pointed to Intel's upcoming 14A node as a possible vehicle for a deeper Apple relationship in 2028 and beyond.

Stakes for the Industry

The implications reach well beyond either company. For Intel's foundry business, which has lagged TSMC for years and is not expected to break even until 2027, an Apple contract is the validation it has been chasing. As one chip analyst put it to CNBC, Apple's notoriously demanding designs and quality bar mean that proving Intel can manufacture them removes a major reputational obstacle for other potential customers. Nvidia, AMD, Qualcomm, and others have shown varying degrees of interest in Intel's foundry but have largely held back. An Apple win could change that calculus.

For TSMC, the deal represents the first meaningful crack in what has been near total dominance of leading edge logic manufacturing. Even a partial loss of Apple's volume puts pressure on the Taiwanese giant to accelerate its US expansion and continue advancing its own roadmap.

For US industrial policy, the deal is a clear signal that the multibillion dollar push to reshore advanced semiconductor manufacturing is starting to bear fruit. Intel was the centerpiece of that strategy, and Apple's willingness to commit production volume validates the bet.

What to Watch Next

Several open questions remain. Apple and Intel have both declined to comment on the deal, and pricing, volume commitments, and exact product timelines have not been disclosed. The 2027 production target gives Intel time to demonstrate 18A yields with its own products first, including the Panther Lake consumer chips shipping later this year and the Clearwater Forest server platform due in 2026. Those launches will be closely watched for signs that Intel can deliver at the scale and quality Apple requires.

If everything holds together, 2027 will mark the first time in seven years that an Apple chip rolls off an Intel production line. The relationship will look nothing like the one that existed before, but for both companies, it represents a remarkable second act.