Apple Diversifies its Supply Chain with New Intel Chips Deal

Following a year of intensive talks, Intel and Apple have reached a preliminary agreement for the US chipmaker to produce processors for Apple devices, as per Wall Street Journal (WSJ) reports.

This agreement 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. 

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 WSJ report, along with a strong Q1 earnings report, sent Intel’s stock flying.

The shares jumped approximately 14% during Friday’s session following the news, then added another 6% gain in Monday premarket trading, reaching US$130.13.  

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%. 

An official familiar with the matter said that the administration has been trying to bolster Intel, not because of its equity stake, but because ​the company is a major US semiconductor producer.

He says: “In general, we want to and have been helping ​Intel. We have been trying to drum up business for Intel.”

According to the WSJ reports, Commerce Secretary, Howard Lutnick, met repeatedly over the past year with senior Apple officials, including CEO Tim Cook.

Howard also held talks with SpaceX CEO Elon Musk and NVIDIA CEO Jensen Huang to encourage them to work with Intel.

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

Diversifying the supply chain for Apple

While it is unclear which Apple products Intel would make chips for, the deal will 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.

The Apple CEO also mentioned on a recent earnings call that iPhone sales were held back by supply constraints.

By moving some production to Intel, Apple will ensure its supply chain is not entirely dependent on a single company or a single region, reducing its exposure to geopolitical risks from Asia.

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.