Apple and Intel are nearing a groundbreaking deal that could change how chips are made for your favorite devices. This partnership might improve product performance and keep costs in check for consumers like you.

The Shift in Chipmaking

Intel and Apple are reportedly finalizing an agreement for Intel to produce some chips for Apple devices. This step represents a major change in the chip industry, especially as both companies are under pressure due to rising demand for advanced chips.

Reports indicate that discussions between Intel and Apple have been ongoing for over a year, and a preliminary agreement has been struck. As a result, Intel shares surged nearly 14%, while Apple shares saw a 2% increase. Although both companies have chosen not to comment publicly, industry analysts are optimistic. Chip analyst Ben Bajarin has expressed strong confidence that the deal will come to fruition, implying that this partnership could bolster Intel’s struggling chip foundry business.

For Apple, this marks a significant shift since the company currently relies exclusively on Taiwan Semiconductor Manufacturing Company (TSMC) for its chip production. As demand escalates, particularly for AI chips, having another reliable supplier will help Apple meet consumer needs more effectively.

Intel’s Capacity Expansion

Intel seems ready to meet Apple’s demand. The company is ramping up its production capabilities, including a new chip fabrication plant in Chandler, Arizona. This facility is creating chips using Intel’s latest production process, known as the 18A node. This level of production is aimed at rivaling TSMC’s advanced 2nm nodes currently being manufactured in Taiwan.

Analysts suggest that Apple may choose to wait until Intel’s next production node, called 18A-P, is available. This new version is expected to resolve some initial production challenges Intel faced with its earlier processes. By aligning with Intel, Apple could potentially enhance its chip quality while alleviating some of its reliance on TSMC.

A Competitive Landscape

Intel’s partnership with Apple could signify a shift in the power dynamics among chip manufacturers. Currently, Intel primarily manufactures chips for its own devices, having faced years of delays and inefficiencies in its foundry operations. However, many experts think that’s changing. Bajarin notes that Intel has emerged as a credible contender in the chip manufacturing space.

The implications of this partnership extend beyond just Intel and Apple. If Apple begins sourcing chips from Intel, it could lead to changes in how TSMC operates, as they have been Apple’s main supplier. The move could also spur competition among manufacturers like Samsung, who are also working to secure contracts with Apple for chip production.

Apple’s commitment to finding multiple sources for its chips is strategic, considering the huge demand for semiconductors in the technology sector. As it stands, TSMC cannot produce chips faster than the market demands.

Challenges Ahead

Despite the optimism surrounding the Intel and Apple deal, several challenges remain. Intel has only recently begun to consistently improve its chip output and quality. Any hiccups in this new production could affect Apple’s ability to deliver products promptly to its consumers.

Furthermore, Apple has also been exploring potential partnerships with other companies, like Samsung, for chip manufacturing. As Apple weighs its options in this competitive landscape, the ability to manage relationships across multiple manufacturers will be crucial.

The overarching narrative paints Intel as a revitalized player in the chip market, while Apple is strategizing to mitigate risks in its production supply chain.

What this means for you

This development could lead to more options and better technology in the devices you use every day. You might see improved chip performance, which can enhance everything from smartphone speed to the capabilities of your home devices.

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Source: https://www.cnbc.com/2026/05/08/intel-stock-apple-chip-deal.html