Apple and Intel Just Struck a Chip Deal That Changes Everything for Both Companies

For the better part of a decade, every chip inside every iPhone, Mac, and iPad came from the same place: a semiconductor giant in Taiwan called TSMC. That era is ending.

Apple and Intel have reached a preliminary agreement for Intel to manufacture some of the chips that power Apple devices, according to people familiar with the matter cited by the Wall Street Journal. The two companies spent more than a year in intensive negotiations before hammering out a formal deal in recent months. Intel's stock jumped more than 15% on the news. Apple shares rose roughly 1.7%.

Neither company has officially confirmed the deal or commented publicly on the details.

What the Deal Actually Means

Apple ships more than 200 million iPhones per year, plus millions of iPads and Mac computers. It designs its own chips in-house — the M-series chips in Macs and iPads, and the A-series chips in iPhones — but relies entirely on outside manufacturers to actually fabricate them. Until now, that manufacturer has been TSMC, which also supplies chips to Nvidia, AMD, and virtually every other major tech company in the world.

That concentration creates a problem. TSMC's capacity is finite, and demand for advanced chips has exploded alongside the AI boom. Apple CEO Tim Cook has previously acknowledged supply limitations affecting iPhone production. Finding a second manufacturing partner isn't just smart diversification — it's a strategic necessity.

Intel is the only American company with the scale and technical capability to serve as that second source. Its new chip fabrication plant in Chandler, Arizona is now in high-volume production on what Intel calls its 18A process node — designed to rival TSMC's most advanced manufacturing processes, which are currently only produced in Taiwan.

Analyst Tim Bajarin said Apple is most likely to start with Intel's next node, called 18A-P, which could be ready to scale as soon as next year and which he described as cleaning up issues with the current 18A process. Late 2025 reports suggested Intel would initially produce M-series chips for Mac and iPad, with a possible extension to iPhone chips later.

What It Means for Intel

For Intel, landing an Apple contract is transformational. The company's chip manufacturing business — its foundry division — has spent years struggling with delays and low yields that raised serious questions about whether it could compete for outside customers at all. Until this deal, Intel remained essentially the only customer for its own foundry.

Intel shares have risen more than 200% this year as the company's recovery has accelerated. Elon Musk tapped Intel for his TeraFab AI chip project. Nvidia invested $5 billion in the company. And now Apple — the world's most demanding hardware customer — has signed on.

"Intel is the only place that can scale up capacity as a viable second source," Bajarin said.

The Bigger Picture

The deal fits neatly into a broader policy push by the Trump administration to move semiconductor manufacturing back to American soil and reduce U.S. dependence on Taiwanese chip production. TSMC has also been building new fabs in Arizona, where Apple has separately committed to producing some of its silicon. The Apple-Intel agreement accelerates that shift.

For consumers, the immediate impact is minimal — Intel-made Apple chips are likely still a year or more away from reaching actual devices. But the deal signals a fundamental restructuring of how the world's most valuable hardware ecosystem gets built, and where.

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