Intel, Apple partner on US chip manufacturing; INTC +10%

President Donald Trump confirmed Thursday that Apple has agreed to work with Intel to design and manufacture chips in the United States. Intel's stock surged 10.5% to $133.82 on the news, while Apple and Intel declined immediate comment. The deal marks a strategic pivot for Apple, which has relied almost entirely on Taiwan Semiconductor Manufacturing Company (TSMC) for advanced chip production since dropping Intel processors from Mac computers in 2020.

The partnership focuses on foundry manufacturing rather than chip design—Apple will continue designing its own processors while Intel manufactures them domestically at facilities in Oregon and Arizona. Analysts expect the arrangement to cover legacy and lower-tier chips initially, not Apple's flagship high-end processors, where TSMC remains the incumbent. Ming-Chi Kuo reported in May that Intel had already begun testing production of Apple chips on Intel's 18A-P process, with deliveries targeted for 2027.

For Intel, landing Apple as a customer validates its foundry ambitions after years of struggling to convince external customers that its manufacturing can match TSMC on yield and reliability. The deal comes just weeks after Intel disclosed its 18A-P node had entered risk production. The U.S. government, which holds a ~10% equity stake in Intel acquired last year for $8.9 billion, benefits from the arrangement as part of a broader effort to onshore semiconductor manufacturing.

For Apple, the partnership reduces dependence on TSMC concentration risk during an era when AI-driven demand has consumed much of TSMC's leading-edge capacity. CEO Tim Cook told the Wall Street Journal this week that Apple is facing "unsustainable" cost pressures from rising memory and storage chip prices driven by AI demand. Intel capacity offers supply-chain diversification and helps Apple's domestic manufacturing narrative.