Apple and Intel: A Strategic Partnership for AI Chips

A Strategic Partnership on the Horizon Between Apple and Intel

Apple may soon partner with Intel for the manufacturing of its future AI chips, according to information from the Wall Street Journal. After more than a year of discussions, a preliminary agreement has reportedly been reached between the two tech giants. This news was well received by the market, with Intel's stock rising notably by 14% and a 2% gain for Apple. For Intel, this partnership would represent a crucial validation of its foundry business, often perceived as a weakness in the face of the dominance of Taiwan Semiconductor Manufacturing Company (TSMC).

Reducing Dependence on TSMC

Apple is looking to diversify its sources of AI chip supply, which are currently almost exclusively produced by TSMC for its iPhones, Macs, and future AI systems. TSMC is a key player in the advanced semiconductor field, thanks to its mastery of the finest etching processes. However, the rise of generative AI has intensified demand, putting pressure on existing production capacities. Companies like Nvidia, Microsoft, Amazon, Google, and Meta are already mobilizing a significant portion of the most advanced manufacturing lines, prompting Apple to secure new industrial capabilities.

Intel, a Credible Alternative

According to Ben Bajarin, an analyst at Creative Strategies, Intel is currently "the only credible alternative" to become a second large-scale industrial source for Apple. This diversification would allow Apple to mitigate risks associated with geopolitical tensions surrounding Taiwan and ensure sufficient volumes for its future AI products.

Intel Strengthens Its Position in Semiconductors

Intel's foundry business has long been hampered by technological delays and yield issues. However, the situation is evolving with increased investments, particularly in the United States. The new factory in Chandler, Arizona, is already producing chips based on the 18A process, considered Intel's most advanced technology. This etching node is intended to compete with TSMC's future 2 nm process.

Apple may be waiting for Intel's next technological evolution, called 18A-P, which is expected to address several limitations of the current platform and enter mass production as early as next year. For Intel, a contract with Apple would be a strong symbol, demonstrating that its foundry business is finally mature and competitive against Asian leaders.

A Global Competition for Production Capacities

This potential alliance between Apple and Intel illustrates the intensifying global competition around AI chip production capacities. Currently, only three companies—TSMC, Intel, and Samsung Electronics—have the necessary technologies to produce the most advanced semiconductors. Apple has also reportedly visited Samsung's new Texas factory to assess its future industrial capabilities.

Even if Apple partially turns to Intel, this would not pose an immediate threat to TSMC, which is already operating at full capacity. However, TSMC's CEO, CC Wei, recently referred to Intel as a "formidable competitor," emphasizing that the industry is taking Intel's return to advanced manufacturing seriously.

This dynamic could reshape the global balance of AI semiconductors in the coming years, with stakes in technological sovereignty, rapidly growing demand, and industrial reshoring to the United States. For Apple, the stakes are crucial for its AI strategy, as the market becomes increasingly critical for the entire tech industry.