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Apple, Intel have reached preliminary chip-making deal: Report

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🤝 Intel has reached a preliminary deal with Apple to manufacture chips for its devices, according to a Wall Street Journal report.

📈 The news sent Intel's stock up 15% while Apple shares rose about 1.7% in afternoon trading.

🇺🇲 The U.S. government, now Intel's largest shareholder following an investment deal with CEO Lip-Bu Tan, played a key role in the negotiations.

⚠️ While the specific products are unclear, a deal would provide Apple with diversified manufacturing capacity beyond its current reliance on TSMC.

🏭 This agreement aims to revitalize Intel's lagging foundry business and secure steady demand from one of the world's largest consumer electronics companies.

📉 Apple CEO Tim Cook previously noted that iPhone sales were hampered by supply constraints at its contract manufacturers.

🔥 The U.S. Commerce Department, led by Secretary Howard Lutnick, actively facilitated meetings between Intel executives and tech leaders like Tim Cook, Elon Musk, and Jensen Huang.

💼 Intel has been pursuing recovery through major investments from entities including Nvidia, SoftBank, and the U.S. government under CEO Lip-Bu Tan's leadership.

🏗️ The deal comes as TSMC faces extreme demand pressure from AI firms like Nvidia and AMD, making capacity allocation challenging for clients like Apple.

🚀 Elon Musk recently confirmed Tesla will use Intel's 14A manufacturing process for its next-generation Terafab project in Austin.

📰 Sources indicate intensive talks between the companies lasted more than a year before finalizing this formal preliminary agreement.

🤫 Both Apple and Intel declined to comment on specific details, though Bloomberg reported earlier discussions about Samsung as well.

Bullish Signals
  • Intel's stock extended gains by 15% following the news of a preliminary deal with Apple, indicating strong investor confidence.
  • Apple shares rose about 1.7% in afternoon trading, reflecting a positive market reaction to the potential partnership.
  • The agreement provides Intel with a steady stream of demand from one of the world's largest consumer electronics companies, bolstering its manufacturing business reputation.
  • For Apple, the deal offers diversification in manufacturing, enabling it to secure more capacity as it has been constrained by tight supply at TSMC.
  • Commerce Secretary Howard Lutnick and other high-ranking officials have successfully engaged key tech leaders like Tim Cook, Elon Musk, and Jensen Huang to foster business with Intel.
  • Tesla's upcoming use of Intel's next-generation 14A manufacturing process for its Terafab project demonstrates Intel's growing technological credibility in AI chip production.
  • Intel CEO Lip-Bu Tan's efforts to turn the company around are gaining traction with major strategic investments and partnerships.
Risk Factors
  • Intel's manufacturing business has fallen behind TSMC in recent years, indicating a loss of technological or market ground to a major competitor.
  • Apple recently had iPhone sales held back by supply constraints at its contract manufacturer, highlighting ongoing capacity issues.
  • It is unclear which specific Apple products Intel would make chips for, introducing uncertainty into the deal's impact and scope.
  • Securing chip capacity remains extremely difficult due to swelling demand from AI firms like Nvidia and AMD, potentially limiting Intel's ability to capture meaningful market share even with this deal.
  • The deal relies on extensive lobbying by the U.S. government and Commerce Secretary Howard Lutnick, suggesting that without such intervention, Apple might not have engaged in serious negotiations with Intel.
Full Analysis
Apple has reached a preliminary agreement with Intel to produce chips for Apple devices, marking a significant shift in the competitive landscape of semiconductor manufacturing. According to a Wall Street Journal report published on May 9, 2026, intensive negotiations lasting over a year concluded recently with a formal deal struck between the two tech giants. This partnership is seen as a major boost for Intel, which has struggled to regain its standing against Taiwan Semiconductor Manufacturing Company (TSMC) in advanced manufacturing processes. The news triggered an immediate positive market reaction, with Intel stock surging approximately 15% and Apple shares rising 1.7% during afternoon trading. The strategic value of this deal extends beyond simple volume; it provides Intel with a steady demand stream from one of the world's largest consumer electronics companies, helping to bolster its reputation and stabilize its foundry business. For Apple, the agreement represents a crucial diversification strategy in supply chain management. Recent earnings reports from Apple CEO Tim Cook highlighted that iPhone sales had been constrained by tight capacity at TSMC, which is also servicing booming demand from AI chipmakers like Nvidia and AMD. By adding Intel as a partner, Apple aims to secure more flexible manufacturing capacity amidst these global constraints. The U.S. government played a pivotal role in facilitating this negotiation, having become Intel's largest shareholder through a deal with CEO Lip-Bu Tan. Commerce Secretary Howard Lutnick engaged in repeated high-level meetings over the past year with executives from Apple, including Tim Cook, as well as Elon Musk of SpaceX and Jensen Huang of Nvidia, to encourage these collaborations. The report notes that while a specific final decision on which products will be manufactured by Intel remains unclear, similar exploratory discussions regarding Samsung for main processors have also taken place. This development aligns with broader government efforts to strengthen domestic chip production capabilities and reduce reliance on foreign manufacturing hubs.