Intel's shares gained substantially after former President Donald Trump stated that Apple had agreed to collaborate with Intel on designing and manufacturing chips in the United States. This news was a significant boost for Intel's efforts to become a contract chip manufacturer for other companies, known as its foundry business.
Intel's stock saw a notable increase, rising by $12.72, or 10.5%, to $133.82 shortly after trading opened on Thursday. This surge also followed earlier gains, with the stock up approximately 2.7% in after-hours trading and as much as 5.7% in overnight trading. The market's enthusiasm for Intel's turnaround efforts has been significant, with the company's stock already up more than 205% this year prior to this announcement.
While Apple did not immediately comment on the announcement, and Intel stated it would not comment on a "potential Apple–Intel agreement," the partnership would diversify Apple's manufacturing base. Apple currently relies heavily on Taiwan Semiconductor Manufacturing Company (TSMC) for its chips, and a deal with Intel could provide a crucial second source, especially given TSMC's advanced production lines are in high demand from AI chipmakers like Nvidia and AMD.
Analysts view this as a strategic move for Apple to reduce its reliance on a single supplier and enhance its "made-in-America" production efforts. Wedbush Securities analyst Dan Ives suggested that this "preliminary deal" followed over a year of negotiations. The deal would provide Intel with consistent demand from one of the world's largest consumer electronics companies and validate its foundry business, which has struggled to compete with TSMC.
This development comes after Intel unveiled its new 18A-P manufacturing process, which promises improved performance, lower power consumption, and better thermal resistance compared to its existing 18A process. A partnership with Apple could provide a significant endorsement for Intel's manufacturing capabilities and further accelerate its turnaround.
