Apple's Plan to Use Intel for Chip Production Came After White House Pressure [Report]

Apple plans to have Intel fabricate chips for iPhones and Mac laptops following pressure from the Trump administration during tariff talks last summer, reports the Wall Street Journal.



CEO Tim Cook traveled to Washington last summer to secure an exemption from a proposed 100 percent tariff on imported semiconductors. During those meetings, President Trump and Commerce Secretary Howard Lutnick urged Cook to use Intel's manufacturing plants to produce some of Apple's chips, according to government officials. Apple ultimately received its tariff exemption after committing to invest hundreds of billions of dollars in the United States. Nearly a year later, Trump announced on social media that Apple would begin using Intel to fabricate chips for some of its products.


The reported arrangement would mark a significant shift in Cupertino's supply chain strategy. Apple has relied almost exclusively on TSMC to fabricate its custom processors for more than a decade. The move also supports the administration's broader push to expand semiconductor manufacturing in the United States while providing Apple with a second fabrication partner.

The U.S. government took an unprecedented 10 percent equity stake in Intel last year by converting $9 billion in federal grants, making it the company's largest shareholder. Lutnick and the Commerce Department have maintained a highly active role in Intel's turnaround under CEO Lip-Bu Tan. Tan visits Washington regularly to brief officials on customer relationships, while the administration has actively encouraged potential clients to do business with the struggling foundry.

Apple is not the only company the administration has encouraged to work with Intel. Nvidia announced a $5 billion investment in Intel alongside plans to purchase custom data center chips, while Elon Musk's SpaceX joined Intel's Terafab manufacturing initiative.

Intel's contract manufacturing business has faced significant headwinds, reporting $10.4 billion in operating losses over the last four fiscal quarters. To regain industry trust, Tan overhauled the company's reporting structure, consolidated custom chip design efforts, and aggressively recruited executives from competitors including Samsung and SK Hynix. Both Intel and the U.S. government view advanced packaging, particularly at the company's New Mexico facility, as one of its best opportunities to compete more effectively with TSMC.


The government stake, together with new strategic partnerships, gave Intel a significant cash infusion that allowed it to maintain equipment spending rather than sharply reducing capital expenditures. Under Tan's direction, the company shifted more of its investment away from constructing new fabrication plants and toward precision fabrication tools, increasing production of high-demand products such as laptop and data center CPUs. Google Cloud also announced a large order for Intel Xeon processors earlier this year, citing improvements in the company's responsiveness to customer feedback and customization requests.

While exact production volumes and the specific Apple-designed chips involved remain undisclosed, shifting even a portion of Apple's processor manufacturing to Intel would provide a major boost to the foundry's credibility.