Apple has initiated small-scale trial production of Apple Silicon chips at Intel
Manufacturing Implications
The trial production focuses on less advanced Apple Silicon components, with an estimated 80 percent destined for iPhones and the remainder for iPads and Macs, mirroring current sales ratios. Intel has set yield targets of 50 to 60 percent or higher for these initial runs. Production is scheduled to ramp up in 2027 and expand further in 2028, though Apple may reduce output by 2029. Kuo notes that Intel is using the 18A-P process, a refined version of its current 18A node, and Apple is also testing newer upcoming Intel processes.
Market Context
Apple has sought manufacturing alternatives for years, with negotiations reportedly predating the recent supply constraints at TSMC driven by AI chip demand. Despite this, TSMC is expected to remain Apple’s dominant supplier, with Kuo estimating it will handle approximately 90 percent of total demand. Intel’s internal sentiment toward the collaboration is described as mixed, though the stock market has reacted positively to the reports. Apple is considered a demanding customer with high quality standards.
Forward-Looking Significance
This partnership positions Intel as a long-term, secondary supplier for Apple Silicon, but it will take years for orders of advanced chips to materialize. TSMC will clearly remain the primary manufacturing partner for the foreseeable future. The move underscores Apple’s strategic imperative to diversify its supply chain, balancing cost, performance, and geopolitical risk. For Intel, it represents a crucial foothold in the foundry market, though the path to significant volume remains protracted.
