Six years after ‘public breakup’, Apple goes back to Intel due to what analysts say is a ‘supply chain problem’

Apple has reached a preliminary agreement with Intel to manufacture some chips for its devices—a deal that would end years of estrangement between the two companies and mark one of the more consequential shifts in the semiconductor industry in recent memory, the Wall Street Journal reported.The two companies have been in intensive talks for over a year, with a formal agreement taking shape in recent months, per WSJ. Neither Apple nor Intel has commented publicly. Intel shares surged nearly 15% on the news; Apple was up roughly 1.7%.The deal would be a significant shot in the arm for Intel’s long-struggling foundry business—and a symbolic homecoming of sorts. Apple relied on Intel processors for its Mac lineup from 2006 until 2020, when it made the celebrated pivot to its own Apple Silicon chips. Intel shares have now climbed more than 200% this year.At the heart of this is a supply chain problem Apple can no longer ignore. TSMC, which manufactures every advanced chip Apple currently uses, is running at full tilt—its wafer capacity stretched thin by soaring AI chip demand from the likes of Nvidia. Apple is TSMC’s second-largest customer. On its April earnings call, CEO Tim Cook acknowledged the company has “less flexibility in the supply chain than we normally would,” with Mac and iPhone supply both constrained by advanced node shortages.Bloomberg reported earlier this week that Apple had also held exploratory talks with Samsung, with executives visiting the Korean giant’s chip plant under construction in Texas. But analyst Ben Bajarin of Creative Strategies put it plainly: “Intel is the only place that can scale up capacity as a viable second source.”The deal’s fine print matters here. Intel is currently ramping high-volume production at its Chandler, Arizona fab on its 18A node—comparable to TSMC’s 2nm process. But Bajarin described 18A as “a little bit rough,” suggesting Apple will likely wait for Intel’s next iteration, 18A-P, which he expects could scale as early as next year.Supply chain analyst Ming-Chi Kuo reported late last year that Intel is expected to begin shipping Apple’s lowest-end M processor—used in the MacBook Air and iPad Pro—on the 18A-P node as early as the second or third quarter of 2027, pending PDK milestone releases. Shipments for that chip are projected at 15–20 million units annually.The WSJ also noted that Commerce Secretary Howard Lutnick met repeatedly with Apple leadership, including Tim Cook, to push the deal—and that President Trump personally made the case for Intel during a White House meeting with Cook.