Shares of Intel (NASDAQ: INTC) surged on Tuesday, driven by renewed optimism that the chipmaker could secure a major external customer for its manufacturing business.
The stock climbed about 15% to its intraday high of $110.48, recouping losses from the previous session and extending its strong run this year.
Investor enthusiasm followed a report that Apple has held exploratory discussions with Intel over using its chip-manufacturing services in the United States.
Apple talks fuel optimism for foundry business
According to a Bloomberg report, Apple is evaluating additional suppliers for its core processors, which are currently manufactured primarily by Taiwan Semiconductor Manufacturing Company.
The iPhone maker has also reportedly engaged in early-stage discussions with Samsung Electronics as part of a broader effort to diversify its supply chain.
The report said Apple was also concerned about the ability of alternative suppliers to match TSMC’s advanced manufacturing capabilities and scale remain a key consideration.
Still, analysts believe discussions may be more advanced than initially indicated.
Ben Bajarin, CEO of Creative Strategies, posted on X that Apple is “much farther along than just ‘discussions’ with Intel on foundry,” while Moor Insights & Strategy analyst Patrick Moorhead described the talks as “much more than exploration” in a Barron’s report.
For Intel, landing Apple as a customer would mark a major breakthrough.
The company has invested heavily in its foundry unit in recent years as part of a broader turnaround strategy, but has so far struggled to attract large external clients.
Supply constraints push Apple to explore alternatives
Apple’s interest in expanding its supplier base comes amid ongoing supply-chain challenges.
CEO Tim Cook recently acknowledged constraints in securing enough advanced processors, stating, “We have less flexibility in the supply chain than we normally would.”
The shortages have been driven in part by strong demand for chips used in artificial intelligence applications and increased requirements for devices capable of running AI models locally.
Apple noted that limited availability of advanced fabrication nodes is the primary bottleneck affecting production.
“The primary constraint is the availability of the advanced nodes our SoCs are produced on, not memory,” Cook said during the company’s earnings call.
These pressures have prompted Apple to consider diversifying beyond its long-standing reliance on TSMC, which has been the exclusive manufacturer of its most advanced chips for more than a decade.
Strategic implications for Intel and the broader market
For Intel, securing Apple as a foundry client would represent a significant milestone in its effort to compete with TSMC in the contract chip manufacturing space.
Under CEO Lip-Bu Tan, the company has been working to rebuild its credibility and attract customers after previous false starts in the foundry business.
A partnership with Apple could also have broader strategic implications.
It may help Intel attract additional clients and strengthen its position as a domestic semiconductor manufacturer, aligning with US government efforts to boost local chip production.
At the same time, Apple stands to benefit from greater supply-chain resilience.
The company has long emphasized the importance of diversification, with Cook previously warning about overreliance on a single geography for critical components.
Despite the optimism, uncertainties remain.
Intel and Samsung are still working to close the technological gap with TSMC, and Apple may ultimately decide to maintain its current supplier relationships.
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