Intel $INTC and Apple $AAPL have reached a preliminary agreement for Intel to manufacture some of the chips that power Apple devices, according to The Wall Street Journal. Intel stock rose sharply on the news.
According to the Journal, a formal deal was hammered out only recently, capping a negotiation process that stretched across more than a year. It remains unclear which Apple products Intel would manufacture chips for. Apple ships more than 200 million iPhones a year, along with millions of iPads and Mac computers. Representatives for both companies declined to comment.
Washington's fingerprints are all over the arrangement. Last summer, the federal government converted roughly $9 billion in previously awarded grants into Intel equity, landing a 10% ownership position in the chipmaker — a move the Journal credits with making Apple willing to engage. Getting those executives to work with Intel became a priority for Commerce Secretary Howard Lutnick, who held multiple meetings over the last year with Tim Cook and other top technology leaders including Elon Musk and Nvidia $NVDA's Jensen Huang, the Journal reported.
The Journal also reported that Trump made his own pitch to Cook directly, raising Intel's case during a White House meeting. "As soon as we went in, Apple went in, Nvidia went in, a lot of smart people went in," Trump said in January.
Bringing Intel into its supply chain would give Apple something it badly needs: an alternative to TSMC $TSM, the dominant contract chipmaker that currently handles production of all the custom silicon Apple puts into its products. Cook has raised the issue on each of Apple's last two earnings calls, telling investors that tight chip availability has crimped iPhone demand and warning that the squeeze will persist into the current quarter, with a number of Mac models affected.
Intel CEO Lip-Bu Tan has been working to revive the company's chip manufacturing business, known as Intel Foundry, since taking over in spring 2025. In addition to the Apple agreement, Intel has recently signed partnerships with Nvidia and Elon Musk's Tesla $TSLA. A September deal saw Nvidia put $5 billion into Intel and commit to having the company manufacture custom processors for Nvidia's data centers. Intel and Musk reached a separate agreement last month to site a chip fabrication facility in Texas under Musk's Terafab initiative, which aims to produce chips for Tesla, xAI, and SpaceX.
Years of stumbles — botched process transitions, revolving-door leadership, and ill-fated consolidation bids — had left Intel lagging well behind TSMC and Samsung as a manufacturer. The Apple deal marks a significant step in its effort to rebuild its position as a contract manufacturer.