Apple, Intel Strike Preliminary Chip Manufacturing Deal Backed by 10% U.S. Intel Stake
Intel and Apple finalized a preliminary agreement after 12 months of talks under which Intel will manufacture some Apple device chips, potentially diversifying Apple’s supply chain beyond TSMC. A U.S. government equity-for-grant conversion of roughly $9 billion gave Washington a 10% Intel stake and was instrumental in bringing Apple to the table.
1. Preliminary Agreement Terms
After more than a year of negotiations, Intel and Apple reached a preliminary pact for Intel to produce chips that power iPhones, iPads or Macs. The agreement marks Apple’s first potential shift of custom silicon work away from Taiwan Semiconductor Manufacturing Company since 2016.
2. Government Stake Influence
Last summer, the U.S. Department of Commerce converted $9 billion in grants into a 10% equity stake in Intel, a move credited with convincing Apple to engage. High-level meetings by government officials with Apple’s CEO helped bridge gaps over supply chain concerns.
3. Supply Chain Diversification Impacts
By adding Intel as a manufacturing partner, Apple aims to reduce concentration risk with TSMC and alleviate chip availability constraints that have hampered device shipments. Intel’s Foundry arm, recently bolstered by partnerships with Nvidia and Tesla, gains a marquee customer as it ramps advanced-node capacity.