Intel Corp.’s stock surged to an all-time high on Thursday after United States President Donald Trump announced that the chipmaker will collaborate with Apple Inc. to design and produce semiconductors domestically.
Trump’s Announcement
Trump did not provide specifics on the partnership, which he mentioned after praising Nvidia Corp. and Elon Musk’s Terafab chipmaking ambitions in a Truth Social post. Earlier reports from Bloomberg indicated that Apple had held exploratory discussions about using Intel and Samsung Electronics Co. to manufacture the main processors for its devices in the United States.
“I decided to help Intel because we need to design and build our Chips right here in America,” Trump posted. “Apple has agreed to work with Intel to design and build its Chips in America.”
Market Reaction
Shares of Intel jumped 13 percent to a record closing price of US$133.99 in New York on Thursday. Apple’s stock rose less than one percent to US$298.01. Intel declined to comment, while Apple did not immediately respond to a request for comment.
Intel’s Comeback Strategy
For Intel, securing external customers for chip production is a critical component of its turnaround plan under chief executive officer Lip-Bu Tan. The company is still in the early stages of attracting clients for its chip foundry business after previous setbacks. Landing Apple as a customer would be a major victory for Tan and could help draw additional business.
Separately, Intel took steps to strengthen its foundry business on Thursday. The company hired industry veteran Seok-Hee Lee as an executive vice-president of the foundry operation, where he will oversee advanced packaging. He will report directly to Tan, alongside current foundry executive vice-president Naga Chandrasekaran, who focuses on manufacturing technologies. Navid Shahriari, another EVP, is retiring as part of the changes, Intel said in a statement.
Implications for Apple
Apple, which relies heavily on Taiwan Semiconductor Manufacturing Co. for chip production, would gain an additional supplier if it partners with Intel. This could help alleviate supply shortages that are driving up component and device prices.
Analyst Insights
Any collaboration between the two companies might start small, according to analysts. Intel has yet to prove that its factories can match the output of TSMC’s advanced manufacturing facilities.
“Intel will of course have to prove their mettle before being granted more substantial wins, but the first step is always the hardest, so at least they appear to be taking that step,” Bernstein analyst Stacy Rasgon said in a research note. “We suspect any early foundry relationship would likely be low-volume, less important parts.”
Background on Intel’s Government Deal
Intel struck an unconventional deal with Trump last year that turned the U.S. government into one of Intel’s biggest investors. Under that agreement, Intel sold a stake worth nearly 10 percent in exchange for state support. Intel’s Tan, who took the reins in March of last year, has also attracted investments from Nvidia and SoftBank Group Corp.
