Intel may soon manufacture some iPhone, iPad and Mac chips: Report

Intel may soon become a manufacturing partner for some Apple chips for the first time in nearly a decade, according to Apple supply chain analyst Ming-Chi Kuo. In a new post shared on Elon Musk-owned X (formerly Twitter), Kuo said Apple has started small-scale testing of lower-end iPhone, iPad and Mac processors using Intel’s 18A-P chip manufacturing process. The move could mark a major shift in Apple’s supply chain strategy, as Taiwan’s TSMC has been Apple’s exclusive chip manufacturing partner since 2016. Kuo said production testing is expected to begin in 2026, with larger-scale manufacturing likely to grow through 2027 and 2028. However, he added that TSMC is still expected to handle more than 90% of Apple’s chip supply even if Intel’s manufacturing plans move forward successfully. Below are my latest industry checks on the Apple-Intel partnership, which help interpret it at a deeper level:Apple has kicked off low-end/legacy iPhone, iPad, and Mac processors at Intel on the 18A-P series (using Foveros packaging).The order mix is roughly 80% iPhone, mirroring Apple's end-device sales mix.Apple's wafer plans at Intel reflect the technology lifecycle of the 18A-P series: small-scale testing in 2026, ramp in 2027, continued growth in 2028, and decline in 2029.Apple is also actively evaluating Intel's other advanced-node technologies.Intel's mass production timeline and shipment scale remain unclear, and assemblers/EMS have yet to see any shipment schedules.Intel's 2027 yield target is to first stabilize at 50–60% or higher.Even if Intel's initial shipments go smoothly, TSMC will still retain over 90% of supply share.Internally, sentiment at Intel toward Apple’s orders appears mixed.Apple began discussions with Intel well before TSMC's advanced-node capacity became tight.Apple recognizes that TSMC's resources will continue tilting toward AI.Building on these findings, this analysis examines the three parties’ strategic responses to the structural shift in advanced-node manufacturing. TSMC stands out here, as the industry leader and a passive party in this event. What it appears able to do is limited, but the situation deserves deeper reading.Apple is systematically cultivating Intel to become a long-term key supplier:Apple has kicked off three main product lines at Intel simultaneously, with wafer allocation roughly matching its end-device sales mix. This indicates Apple is simulating and validating Intel's potential as a full-product-line supplier, deliberately using the complete 18A-P generation to optimize yield and collaboration processes, rather than merely placing a low-risk trial order.Beyond the usual considerations of reducing single-source risk and strengthening bargaining power, the key to Apple's approach lies in its recognition that the gap in revenue contribution to TSMC between AI/HPC and smartphones will continue to widen. Apple therefore needs to cultivate a new supplier while it still holds bargaining power, leveraging its design capabilities to maintain its relationship with TSMC while advancing its partnership with Intel.Intel faces unprecedented opportunities and formidable challenges:For the next several years, the bulk of advanced-node orders will remain with TSMC. Apple is therefore one of the very few, and arguably the most complete, foundry training opportunities available to Intel: the orders span Apple's full product line, are large enough in scale, and require dynamic design and production adjustments in response to market shifts. Although Apple’s orders are unlikely to dramatically reverse IFS’s quarterly losses in the short term, and shipment share will remain constrained by capacity and yield, the strategic significance of this partnership runs far deeper than the headline financials.That said, Apple's demanding standards, combined with Intel's strategy of simultaneously taking orders from other customers, will amplify the difficulty of rebuilding Intel's advanced-node foundry business. Intel’s own efforts, geopolitics, and customer-side hedging have together given Intel a once-in-a-generation window to rebuild its foundry business. Whether Intel can turn this window into results now depends entirely on execution.TSMC remains secure for the next several years, but its leadership is becoming a focal point for risk hedging across the industry:As TSMC's advanced-node capacity becomes a scarce resource and its allocation keeps tilting toward AI, it is only natural that Apple would turn to Intel to strengthen its bargaining position. But Apple is far from alone. Major players across the advanced-node ecosystem are actively hedging against TSMC: the U.S. government through a suite of semiconductor policies, Apple by cultivating Intel, and Samsung by deploying its outsized memory profits to fund advanced-node investment. By comparison, TSMC's current response rests largely on superior execution, essentially betting its competitive position on a single assumption: that its execution will continue to lead.Execution matters, but beyond execution, TSMC's hedging options are also genuinely limited, and this is structural in nature. Geopolitically, the United States is TSMC's critical market and technology partner, yet the U.S. government is simultaneously its largest source of policy pressure; other potential partners (China, the EU, Japan) either cannot or do not effectively serve as hedges. In terms of corporate strategy, the standard external hedging playbook, including business diversification, customer base broadening, technology licensing, and supply chain localization, delivers diminishing marginal returns precisely because of TSMC's leadership position.Accelerating internal capital accumulation should be the most pragmatic available path, and that capital comes from TSMC's pricing power in advanced nodes. Building internal capital requires not only reasonable margins but also the ability to price in future risks, which suggests room for a more flexible pricing approach than today's. Intel is a concrete case in point: when Intel outsources its own products to TSMC in order to free up internal capacity to work with Apple, this is no ordinary order from TSMC's perspective; it is an order that carries latent competitive risk. If TSMC decides to take Intel’s orders, it should factor this competitive dynamic, shaped by geopolitics and customer-mix restructuring, into its risk pricing and capacity allocation decisions.