Intel Seeks Foundry Rebound as Apple Diversifies Beyond TSMC
Intel eyes Apple chip production, signaling a foundry comeback. (Photo courtesy of Reuters)
Intel, long regarded as a weak player in the foundry (semiconductor contract manufacturing) sector, is reportedly in discussions to produce some of Apple’s proprietary chips. What makes the development particularly notable is that the Trump administration is said to have played a behind-the-scenes role in brokering the agreement, raising expectations that Intel could leverage strong government backing to break through TSMC’s dominance and restore its competitive standing.
According to industry insiders and foreign media reports on May 11, Intel has reached a preliminary agreement to use its own foundry operations to manufacture some of Apple’s custom-designed chips. The specific type of chip Intel is set to supply has not been confirmed. The two companies are said to have been engaged in negotiations for more than a year ahead of this agreement, with the specific terms of the contract finalized only recently.
Industry observers interpret the supply deal as part of Apple’s strategy to diversify beyond TSMC, which has long handled the vast majority of Apple’s chip production. “It appears to be a situation similar to the one where foundry demand has become so concentrated at TSMC that major tech companies find it increasingly difficult to secure both volume and pricing leverage,” said one industry insider.
Particularly noteworthy is the reported influence of the Trump administration over the order discussions between Intel and Apple. According to The Wall Street Journal (WSJ), President Trump personally encouraged Apple to partner with Intel. In addition, Commerce Secretary Howard Lutnick is said to have met with Apple CEO Tim Cook and others to persuade them to collaborate with Intel.
This kind of support appears to be an extension of the U.S. semiconductor manufacturing revival initiative, which centers on expanding domestic production capacity. The U.S. administration previously acquired approximately 10% of Intel’s shares last year, securing the position of largest shareholder. At the time, the move was widely interpreted as a strategic step by Trump to shore up Intel, which had been drawing increasingly skeptical assessments as its foothold in the semiconductor market eroded. According to market research firm TrendForce, Intel’s share of the global foundry market last year amounted to less than 1%.
Bolstered by government support, Intel is building out a portfolio aimed at staging a foundry comeback. Last year, Nvidia, the leader in graphics processing units (GPUs), invested $5 billion in Intel and agreed to jointly develop central processing units (CPUs) for data centers, among other products. Beyond that, Intel is participating as a key partner in “Terra Fab,” a semiconductor manufacturing project led by Tesla CEO Elon Musk.
Kim Eun-jin
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