Apple Deal Could Be a Game-Changer

• Analyst Ming-Chi Kuo predicts that Apple will use Intel foundries to produce its low-end M-series chips.

• Diversification makes sense for Apple, and the deal would be a major win for Intel’s struggling foundry business.

• In addition to additional foundry revenue, the Apple deal will provide strong support to Intel’s manufacturing operations.

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Although there is nothing official or guaranteed, Intel (NASDAQ: INTC) may be expected to win apple (NASDAQ:AAPL) As a major OEM customer. In a recent article on X, analyst Ming-Chi Kuo noted that Intel’s profile as an advanced node supplier has “increased significantly.”

Kuo said Apple’s experience with the early process design kit (PDK) for Intel’s 18A-P process, an enhanced version of Intel’s 18A process, has met expectations. Apple is currently waiting for version 1.0, which Intel expects to launch in the first quarter of 2026. The PDK enables potential customers to design, simulate and verify chip designs for specific manufacturing processes.

Kuo said Apple plans to use Intel’s 18A-P process in its lowest-end M-series processors, which currently power the MacBook Air and iPad Pro, and are expected to start shipping around the second quarter of 2027. Guo expects initial annual production to be between 15 million and 20 million units.

If the Apple deal goes through Intel’s initial revenue impact will make sense. Apple reportedly paid TSMC Each A18 chip is about $45, and the cost of TSMC’s next-generation nodes is expected to rise significantly. Depends on volume and amount Apple pays Intel a per-chip fee, a potential deal that could be worth $1 billion a year to Intel.

Beyond revenue, a major benefit for Intel is that it will receive a vote of confidence from the world’s largest semiconductor buyer. Intel faces technical hurdles as it attempts to build a sustainable and competitive foundry business, including achieving manufacturing volumes to generate acceptable profit margins. The bigger challenge, however, is gaining the trust of potential customers.

Intel tried to build a foundry business more than a decade ago, but the company ultimately abandoned the effort. Apple reportedly considered Intel as the manufacturer of its iPhone chips in 2011, but ultimately chose TSMC. TSMC founder Chang Chang once said that Apple CEO Tim Cook told him that “Intel simply doesn’t know how to be a foundry.”

That perception remains the most significant challenge Intel faces as it once again strives to become a world-class foundry. Intel CEO Lip-Bu Tan has made listening to customers a top priority, something Intel has struggled with in the past. This strategy is clearly working as Apple selects Intel as its manufacturing supplier.