Intel shares surge 16 per cent on reports of preliminary Apple chip manufacturing deal

Intel shares surged as much as 16 per cent on Friday after reports that Apple is in preliminary talks with the chipmaker about a manufacturing partnership, a deal that would reshape the semiconductor supply chain and signal a shift in Apple’s processor strategy.

The rally added approximately $25 billion to Intel’s market capitalisation, pushing the stock to its highest level in six months. Trading volume in the first hour exceeded the full-day average, reflecting investor enthusiasm for a tie-up that analysts said could accelerate Intel’s foundry business ambitions.

Partnership details

The reported negotiations centre on Intel manufacturing custom chips for Apple using its advanced 18A process node, which the company has positioned as a rival to TSMC’s leading-edge fabrication technology. Apple currently sources its A-series and M-series processors exclusively from TSMC, but has signalled interest in diversifying its supply chain amid geopolitical tensions over Taiwan.

Intel’s foundry division has been seeking anchor customers since the company restructured its manufacturing operations in 2024. Winning Apple as a client would validate Intel’s turnaround strategy under chief executive Pat Gelsinger, who has invested billions in restoring the company’s manufacturing competitiveness.

Market reaction

Intel’s gains pulled the broader semiconductor sector higher, with the Philadelphia Semiconductor Index rising 2.3 per cent. AMD shares fell 1.8 per cent on the news, as investors assessed the potential competitive implications of an Intel-Apple partnership.

“The scale of Intel’s share move tells you this is more than just rumour-chasing,” said Stacy Rasgon, an analyst at Bernstein. “If Apple moves even a portion of its chip volume to Intel, it transforms the foundry business case.”

What happens next

Neither company has confirmed the talks, and Apple typically maintains a multi-year design and manufacturing roadmap that would complicate a rapid switch. Any agreement would require Intel to demonstrate it can meet Apple’s exacting yield and performance standards at scale, a hurdle that has tripped up previous attempts to break TSMC’s grip on Apple’s business.

The Wall Street Journal reported that discussions are at a preliminary stage and cautioned that a deal is not imminent. Intel’s stock pared some gains through the afternoon, closing up approximately 12 per cent on the day.