Intel Stock Rises on Reports of Chip Manufacturing Partnership with Apple

Intel stock (NYSE: INTC) rose over 10% on Friday amid reports that the company is working on a partnership with Apple, a decade after the Cupertino-based company began transitioning away from Intel processors for its Mac lineup. The new potential partnership centers not on Intel designing chips for Apple, but on Intel’s Foundry Services (IFS) manufacturing Apple’s custom-designed M-series processors.

Intel Might Make Chips for Apple

Intel is reportedly positioning itself to become a foundry supplier for Apple’s lowest-end M-series chips, which are primarily used in devices like the MacBook Air and iPad Pro/Air models, with the production scheduled to begin in the second or third quarter of 2027.

The chips would utilize Intel’s cutting-edge 18A-P advanced manufacturing process (a derivative of the 18A node, Intel’s first sub-2nm technology available in North America). Apple has already signed an NDA and obtained early development kits to evaluate the process.

Apple’s Relations with Intel Have Been Nuanced

Notably, Apple’s relationship with Intel has been somewhat nuanced, and Intel had previously turned down requests to supply processors for the Apple iPhone. The company believed that Apple might not be able to sell enough of these, and it was a tiny market to bet on. In hindsight, it was perhaps the biggest mistake Intel made, as global smartphone sales now far exceed those of PCs.

Apple was once a key Intel customer but moved away from Intel’s processors for its Macs beginning in 2020, transiting to its own custom silicon chips, manufactured by TSMC. Meanwhile, Intel has been looking to challenge TSMC, the world’s biggest foundry, with its own foundry operations.

However, Intel’s foundry business, which seeks to make chips for third parties, has failed to take off and has lost billions of dollars. The company has since scaled back its foundry business, and CEO Lip-Bu Tan has stated that it will proceed with the 14A production process only after receiving confirmed orders from customers.

Apple-Intel Partnership Could be a Win-Win

Meanwhile, any possible collaboration between Apple and Intel could be a win-win that addresses both technological advancements and crucial geopolitical/supply chain concerns. For Intel, securing Apple, a demanding, top-tier client, would be a major validation of Intel’s advanced 18A process and its broader IFS turnaround strategy.

For Apple, a partnership with Intel will help reduce its current near-sole reliance on Taiwan Semiconductor Manufacturing Company (TSMC) for custom silicon and address risks related to potential disruptions in East Asia.

Moreover, manufacturing a portion of its chips in the US (like Intel’s Arizona facilities) aligns with the Trump administration’s push for domestic production. The President has backed domestic chip manufacturing, and earlier this year, the US government took a stake in Intel.

The government’s equity stake in Intel was funded by the $3.2 billion awarded to the company as part of the Secure Enclave program, as well as through the remaining $5.7 billion in grants that it was awarded, but not yet paid under the CHIPS and Science Act.

Under the new arrangement, the government acquired 433.3 million shares of Intel at a discounted price of $20.47 per share, a move Commerce Secretary Howard Lutnick hailed as a way to get “equity for the American people.”

Additionally, the government received a five-year warrant, at $20 per share for an additional 5% of stake, which would be exercised only if Intel’s stake in its foundry business falls below 51%.

INTC Has Secured Billions of Dollars in Funding

Meanwhile, Intel has attracted billions of dollars in investments over the last couple of months. In September, Nvidia announced a $5 billion investment in the company. As part of the agreement, Nvidia will acquire common stock and forge a strategic partnership to co-develop products for AI infrastructure and personal computers.

This deal was a substantial lifeline for Intel, which has struggled financially and technologically after missing the shift to mobile computing and, more recently, falling behind in the AI boom. The company posted significant losses last year and in the first half of this year.

For Nvidia, this investment was a strategic power play. It enhances its ability to control more of the computing stack, especially in AI infrastructure, by aligning with the dominant CPU provider. It also reduces reliance on external bottlenecks and gives it greater influence over integrated solutions that combine CPUs and GPUs. By tightly integrating its technology with Intel’s widely adopted x86 architecture, Nvidia strengthens its dominance in the AI market and poses a formidable challenge to competitors like AMD, which has built its market position on strong CPU-GPU integration.

SoftBank Invested $2 Billion in Intel

In August, SoftBank, which vowed to invest $100 billion in the US over four years following a meeting with then President-elect Donald Trump in December 2024, invested $2 billion in Intel at $23 per share.

Meanwhile, Intel is far more than just a chipmaker; it’s a critical component of US manufacturing, economic strength, and national security. As the only leading-edge semiconductor company in the US that both designs and manufactures its own chips, Intel plays an irreplaceable role in the domestic technology ecosystem. This position has become even more vital as the US seeks to re-shore critical manufacturing and reduce its reliance on foreign supply chains.

Chips Are Crucial for AI

The ability to manufacture advanced semiconductors domestically is a strategic imperative for the US. Chips are the essential building blocks for virtually all modern technology, from personal computers and smartphones to military hardware and artificial intelligence systems.