Apple to Use Intel Chips After U.S. Converts Grants

Apple and Intel reached a preliminary agreement for Intel to manufacture some chips used in Apple devices, according to people familiar with the matter. The companies had been in talks for more than a year and signed a formal agreement in recent months. It is not yet known which iPhone, iPad or Mac models will include Intel-made chips.

Apple ships more than 200 million iPhones each year along with millions of iPads and Mac computers. Any change in Apple’s supply chain could shift demand across the semiconductor industry.

Intel Chief Executive Lip-Bu Tan has focused on rebuilding both the company’s chip-design unit and its foundry business, which manufactures chips for outside customers. Intel’s foundry operations had struggled before Tan became CEO last spring.

The U.S. government converted nearly $9 billion in federal grants into an approximately 10% stake in Intel last summer. That stake has since risen in value to about $56.5 billion, an increase of about $47.6 billion from the initial grant amount.

Commerce Secretary Howard Lutnick spent the past year meeting with major technology executives, including Apple Chief Executive Tim Cook, Elon Musk and Nvidia Chief Jensen Huang, to encourage partnerships with Intel. Nvidia invested $5 billion in Intel in September and the two companies agreed to develop custom data center central processing units.

Intel and Elon Musk disclosed plans to build a chip manufacturing plant in Texas tied to Musk’s Terafab initiative, intended to produce chips for Tesla, xAI and SpaceX.

The agreement with Apple is one of the largest outside-customer wins for Intel Foundry. Intel shares rose about 14% on the news to an all-time high. Broader market indexes also moved higher after the announcement.

In January, former president Donald Trump said he ‘likes Intel’ and stated the government had made ‘tens of billions of dollars’ from the stock conversion, adding that major partners followed the government’s investment.

Intel has said that recent investments and partnerships are intended to expand capacity and win large customers. The company’s ability to deliver wafers at scale and meet Apple’s design and quality requirements will determine the timing and scope of any rollout into Apple devices.