Intel & Apple: Manufacturing Semiconducutors in the US

Intel is set to produce semiconductors for Apple, shoring up its manufacturing business in the US.

Following a year of intensive talks, the companies have reached a preliminary agreement for the US chipmaker to produce processors for Apple devices, the Wall Street Journal reports.

It reunites the two firms years after Apple moved away from Intel chips for Mac computers.

The deal also marks a significant win for Intel's contract manufacturing business, which will benefit from a steady stream of demand from one of the world's largest consumer electronics companies.

Race towards semiconductor production

The US Government played a central role in facilitating the discussions to strengthen domestic semiconductor production.

In 2025, the government transformed its relationship with Intel through a strategic financial intervention. Under a deal brokered with Lip-Bu Tan, Intel's CEO, a US$9bn federal grant was converted into equity.

This move resulted in the Government becoming the largest shareholder in Intel, holding an ownership stake of approximately 10%.

According to the Wall Street Journal, Commerce Secretary Howard Lutnick met repeatedly over the past year with senior Apple officials, including CEO Tim Cook. Mr Lutnick also held talks with SpaceX CEO Elon Musk and NVIDIA CEO Jensen Huang to encourage them to work with Intel.

The company's reputation had fallen behind Taiwan Semiconductor Manufacturing Co. (TSMC) in recent years. This happened when Intel delayed adopting Extreme Ultraviolet (EUV) lithography, a precision technology that allowed TSMC to produce smaller, more efficient transistors.

Partnering with Apple now forces the company to remain at the absolute forefront of manufacturing to meet the high performance standards required for iPhone and Mac silicon.

The Wall Street Journal's report about the development, along with a strong Q1 earnings report, sent Intel's stock flying. The shares jumped approximately 14% during Friday's session following the news.

The partnership also reiterates the Trump administration's commitment to bring more chip production to the US and strengthen domestic manufacturing.

Diversifying manufacturing supply chains

While it is unclear which Apple products Intel would make chips for, the deal could help the former diversify its manufacturing base as it seeks more chip capacity.

The company currently relies heavily on TSMC, which is often bottlenecked by orders from gen AI chipmakers such as NVIDIA and AMD.

Tim Cook also mentioned on a recent earnings call that iPhone sales were held back by supply constraints. By moving some production to Intel, Apple could ensure its supply chain is not entirely dependent on a single company or a single region, reducing its exposure to geopolitical risks from Asia.

The semiconductor shortage experienced across multiple industries in recent years has demonstrated the vulnerability of relying on concentrated production centres.

As strengthening domestic manufacturing remains a priority for the US Government as it vies for dominance over the emerging technology, Intel is evolving its operations by aligning the commercial interests of Apple with the security goals of the country.

This approach could provide a template for other manufacturers looking to balance operational efficiency with supply chain resilience and geopolitical considerations in an increasingly conflict strewn global environment.