Intel Foundry Receives Key Endorsement: Industry Shift Behind Apple's Orders

``` A potential chip foundry agreement between Apple and Intel is reshaping the competitive landscape of the global semiconductor industry. This is not only the strongest signal yet that Intel’s foundry business is emerging from its difficulties, but also marks the possible end of Apple’s years-long exclusive reliance on TSMC. According to sources cited by The Wall Street Journal, negotiations between the two parties have lasted for more than a year and a preliminary agreement was recently reached for Intel to produce some chips for Apple devices. Following the news, Intel’s stock price surged nearly 14% in one day, while Apple’s shares also rose about 2%. Both companies declined to comment. The significance of this deal to the market goes far beyond a typical supply contract. Intel’s stock has risen more than 200% this year; if Apple brings Intel on as a second supplier, it will directly alter the allocation dynamics of advanced process capacities worldwide, posing potential pressure on TSMC’s market standing. Intel Foundry: From Doubt to Endorsement Intel’s foundry business has long been mired in difficulty. For years, it has suffered from delayed capacity and low yields, leading to widespread skepticism about its ability to take on third-party orders. Currently, Intel foundry’s main client remains Intel itself, producing processors and other chips for its own devices, with very few external customers. Chip analyst Ben Bajarin of Creative Strategies said in an interview that this situation is changing. "They've already gone through the toughest phase. Now they can be considered a validated and trustworthy second supplier." He made it clear: "I am one hundred percent confident this deal will happen, just unsure about the timing." Intel is currently accelerating mass production ramp-up of a new fab in Chandler, Arizona, adopting its most advanced 18A process node, which is positioned to compete with TSMC's 2nm node, currently produced only in Taiwan. Apple's Strategic Consideration: Capacity Bottlenecks Forcing Diversification For Apple, this shift is driven by real-world factors. All of Apple's most advanced chips are currently produced exclusively by TSMC, making Apple TSMC's second-largest customer after Nvidia. However, with explosive growth in AI chip demand, TSMC’s wafer fabrication capacity is nearing saturation. "Intel is the only feasible second supplier option for capacity expansion," says Ben Bajarin. Notably, Apple may be cautious in selecting the process node. Bajarin notes that Apple is more likely to wait for Intel’s next-generation 18A-P node, which could reach production scale as early as next year. He describes the current 18A node as "still a bit rough," while the 18A-P "solves many issues." In addition, according to CNBC, Apple executives have also visited Samsung’s new fab under construction in Texas. Currently, Samsung, Intel, and TSMC are the only three companies globally capable of producing the most advanced AI chips, but "none are building fast enough," Bajarin says. TSMC: Subtle Changes in the Competitive Landscape The potential cooperation between Apple and Intel does not mean TSMC will suffer immediate harm. Bajarin believes the deal will not directly impact TSMC, “as they’re already running fabs at full capacity.” However, TSMC’s attitude has subtly shifted. Last month, TSMC President and CEO C.C. Wei referred to Intel as a “strong competitor”—a remark that drew industry attention. Bajarin interprets this as: “If one of your biggest clients is about to sign with a rival, you might make such comments to cushion the blow.” TSMC is also building multiple new fabs in Arizona, and Apple has already committed to manufacturing some chips locally, so the partnership between the two is unlikely to shake in the short term. The Broader Blueprint for Intel Foundry If Apple’s order materializes, it will become the most significant external customer endorsement yet for Intel’s foundry business, but it's only part of Intel’s broader foundry strategy. In advanced packaging, Intel already has major clients such as Amazon and Cisco. This business involves bonding standalone chiplets with memory to produce products like graphics processors. In logic chip foundry, another major external customer commitment comes from Elon Musk. Last month, Musk stated plans to adopt Intel’s future 14A node in his $119 billion Terafab project in Austin, Texas, to make chips for Tesla, SpaceX, and xAI. Intel CEO Lip-Bu Tan said in February this year that the 14A node will begin mass production in 2029. This means Intel’s foundry revenue from external logic chip clients will realistically begin no earlier than 2029 or later. If Apple’s order is delivered ahead of schedule, it will greatly compress this time window, providing earlier and more direct market validation of the commercial credibility of Intel’s foundry business. Risk Warning and Disclaimer The market has risks, and investment requires caution. This article does not constitute personal investment advice, nor does it take into account the special investment goals, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their particular circumstances. Investing accordingly is at your own risk. ```