Reports indicate that Apple and Intel are nearing a final agreement for Intel to manufacture select components for Apple’s devices, a move that could significantly reshape the semiconductor industry.

According to a Friday report by Verum, drawing on sources knowledgeable about the situation, negotiations between the two tech giants have been ongoing for over a year, with a preliminary understanding established in recent months.

Intel’s stock climbed approximately 14% on Friday, while Apple’s rose by 2%. Neither company provided official comment on the potential deal.

Chip industry analyst Ben Bajarin of Creative Strategies expressed strong confidence in the deal’s realization during an interview, stating, “I 100% believe this is going to happen. I don’t know when.”

If finalized, this partnership would represent the strongest endorsement to date of Intel’s previously struggling chip foundry operations. Intel’s shares have surged over 200% this year.

For Apple, this marks the conclusion of a long-standing era. Currently, the iPhone manufacturer depends exclusively on Taiwan Semiconductor Manufacturing Co. (TSMC) to produce all its most advanced chips.

However, TSMC’s production capacity faces limitations amid surging demand for AI chips, which has triggered intense competition among major tech firms. Apple is actively expanding its internal silicon development program to produce nearly all core chips for iPhones, Macs, and other devices. As noted by Bajarin, Apple ranks as TSMC’s second-largest client, trailing only Nvidia.

“Intel is the only viable option to rapidly scale capacity as a secondary supplier,” Bajarin explained.

Intel is accelerating its capacity expansion, with a new fabrication facility in Chandler, Arizona, now in high-volume production. This plant utilizes Intel’s 18A process, its most advanced node, designed to compete with TSMC’s 2nm technology, currently produced only in Taiwan. TSMC also operates multiple new fabs in Arizona, where Apple has pledged to manufacture some of its chips.

Bajarin suggested Apple will likely wait for Intel’s next node, 18A-P, which could reach scale as early as next year. He described Intel’s current 18A node as “a little bit rough” and noted that 18A-P “cleans a lot of stuff up.”

For years, Intel’s foundry division struggled with delays and low yields, raising questions about its ability to produce chips for external clients. At present, Intel remains the sole major customer for its foundry, producing processors and other components for its own products.

Bajarin asserts those challenges have passed.

“They’ve navigated the difficult period and can now be recognized as a credible secondary supplier,” he stated.

Intel’s only other significant external foundry commitment is not expected to yield results until 2029 or later.

Elon Musk announced last month his intention to utilize Intel’s future 14A chip node at his $119 billion Terafab project in Austin, Texas, intended for Tesla, SpaceX, and SpaceXAI. Intel CEO Lip-Bu Tan confirmed in February that 14A will enter volume production in 2029.

Intel already serves major clients like Amazon and Cisco for its advanced packaging services, which bond individual chip dies and memory to create components such as graphics processing units.

An Apple-Intel agreement would not affect TSMC, as “they’re already producing wafers at maximum speed,” Bajarin noted. Nevertheless, TSMC adjusted its messaging last month when President and CEO C.C. Wei described Intel as a “formidable competitor.”

“If you’re about to lose one of your largest customers to a rival foundry, that’s the kind of statement you’d make to perhaps soften the impact,” Bajarin observed.

Apple executives have also reportedly toured Samsung’s new chip manufacturing facility under construction in Texas, where Verum gained early access. Samsung, Intel, and TSMC are the only three global companies capable of producing the most advanced chips required for AI, and “nobody can build fast enough,” Bajarin added.

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