Intel's shares saw a significant jump, rising by 9% in pre-market trading and holding onto a nearly 7% gain by 10:00 a.m. ET, following President Trump's announcement on Truth Social. Trump stated that Apple had agreed to work with Intel to design and build chips in America. This news positioned Intel's manufacturing ambitions for a substantial endorsement, with its stock already up over 205% this year due to turnaround efforts. The partnership is seen as a crucial step for Intel to become a competitive contract manufacturer for non-Intel products, providing steady demand and enhancing credibility for its foundry business which has historically struggled against market leader TSMC.
While the specifics of the agreement, such as volumes, timelines, and which specific chips are included, remain unclear, analysts suggest that initially, Intel would likely manufacture less bleeding-edge components for Apple. This approach would allow Apple to seed the relationship without betting its flagship products on an unproven line. Intel had previously begun risk production of its most advanced chip node, 18A-P, which offers improved performance (9% higher), lower power consumption (18% less), and better thermal resistance (20-40%) compared to its existing 18A process, making it a potential proving point for securing major external customers.
For Apple, this partnership serves to diversify its manufacturing footprint, reducing its heavy reliance on TSMC, whose cutting-edge lines are in high demand from other AI chip developers like Nvidia and AMD. Apple is TSMC's second-largest customer, and finding a viable second source for chip production has been a strategic objective. This agreement would mark a reunion for the two companies, years after Apple transitioned away from Intel-designed processors in its products. The announcement from Trump also mentioned prior involvement in bringing Nvidia to build chips with Intel and Elon Musk's TerraFab project with Intel's technology team, framing the Apple deal as part of a broader push to bring semiconductor manufacturing back to the U.S.
