Apple and Intel have reached a preliminary agreement for the chipmaker to manufacture some of the chips used in Apple devices, according to The Wall Street Journal.
The partnership marks a potential breakthrough for Intel’s struggling foundry business as the U.S. pushes to revive domestic semiconductor manufacturing.
The deal follows more than a year of talks and comes after the Trump administration converted nearly $9 billion in federal grants into Intel equity, giving the government a 10% stake in the company. President Trump personally lobbied for Intel to outgoing Apple CEO Tim Cook.
In the past year, Commerce Secretary Howard Lutnick met with Cook, Elon Musk and Nvidia CEO Jensen Huang to urge them to do business with Intel. Last September, Nvidia invested $5 billion in Intel and hired it to manufacture custom data center CPUs. In April, Musk and Intel agreed to build a chip manufacturing plant in Texas as part of the billionaire’s Terafab project.
The Apple agreement could help diversify the iPhone maker’s chip supply chain beyond reliance on Taiwan’s TSMC, which currently produces the chips powering iPhones, iPads and Macs. Apple has recently warned of advanced chip shortages affecting some Mac models.
The deal also represents a major vote of confidence for Intel CEO Lip-Bu Tan, who has been attempting to reverse years of setbacks. Intel lost ground to rivals such as TSMC and Samsung Electronics after manufacturing delays, leadership turmoil and shrinking external foundry customers weakened its position in the global semiconductor market.
It is not clear which chips Intel would be making for Apple.