The Wall Street Journal (WSJ) reported on May 8 that Apple has tentatively agreed to outsource the production of some semiconductors for its devices to Intel Corporation.
The WSJ stated that Apple and Intel Corporation have been in negotiations for over a year, recently reaching this agreement. However, the specific chips Intel Corporation will produce for Apple products have not yet been disclosed.
The Donald Trump administration played a significant role in facilitating this agreement. According to the WSJ, Commerce Secretary Howard Lutnick has been actively engaging with tech leaders over the past year, including Apple Chief Executive Officer (CEO) Tim Cook, SpaceX CEO Elon Musk, and NVIDIA CEO Jensen Huang, to encourage collaboration with Intel Corporation. President Trump himself reportedly advocated for cooperation with Intel Corporation during a White House meeting with Cook.
Intel Corporation operates both its own chip design division and a foundry business that produces chips for external clients. However, over the past decade, Intel Corporation has fallen behind competitors TSMC and Samsung Electronics due to technical setbacks, leadership changes, and unsuccessful business restructuring efforts, struggling to attract external customers.
Last summer, the Trump administration converted approximately 9 billion USD in federal subsidies for Intel Corporation into equity investments, resulting in the U.S. government holding a 10% stake in the company. Subsequently, NVIDIA invested 5 billion USD in Intel Corporation last September, with both companies announcing a partnership to develop custom central processing units (CPUs) for data centers. In a separate move, Musk’s companies – Tesla, xAI, and SpaceX – recently unveiled plans to construct a massive semiconductor manufacturing facility in Texas in collaboration with Intel Corporation, dubbed the TerraFab project. This facility is expected to produce semiconductors crucial for Musk’s major enterprises.
Apple currently relies heavily on Taiwan’s TSMC for the production of its custom-designed chips used in iPhones, iPads, and Macs. However, the WSJ reports that Apple is under pressure to secure additional suppliers as competition for TSMC’s production capacity intensifies, driven by the surging demand for artificial intelligence (AI) semiconductors.
In recent earnings calls, CEO Cook acknowledged that a shortage of advanced chips is hindering Apple’s ability to meet iPhone demand fully. He added that it might take several months to balance supply for certain models of the Mac mini and Mac Studio.
The WSJ views this tentative agreement as a critical test for the revival of Intel Corporation’s foundry business. Apple has used Intel Corporation CPUs in its Mac computers since 2006 but transitioned to its own M-series chips, based on the architecture of British semiconductor design firm Arm, starting in 2020. If this new collaboration gains traction, it will mark a new chapter in the semiconductor partnership between Apple and Intel Corporation.