-
Analyst Ming-Chi Kuo predicted that Apple would use Intel Foundry for its low-end M-series chips.
-
Diversification makes sense for Apple, and a deal would be a major win for Intel’s struggling foundry business.
-
Beyond the additional foundry revenue, an Apple deal would provide a powerful endorsement of Intel’s manufacturing operations.
-
10 stocks we like better than Intel ›
While nothing is official or guaranteed, Intel (NASDAQ: INTC) may be on track to win Apple (NASDAQ: AAPL) as a major foundry customer. In a recent post on X, Analyst Ming-Chi Kuo noted that visibility around Intel becoming an advanced node supplier had “improved significantly.”
According to Kuo, Apple’s experience with an early process design kit (PDK) for Intel’s 18A-P process, an enhanced version of its Intel 18A process, has met expectations. Apple is now waiting for version 1.0, which is expected from Intel in the first quarter of 2026. The PDK enables potential customers to design, simulate, and verify chip designs for a specific manufacturing process.
Kuo says that Apple plans to use the Intel 18A-P process for its lowest-end M-series processors, which currently power the MacBook Air and iPad Pro, with shipments expected to begin around the second quarter of 2027. Kuo expects initial annual volumes between 15 million and 20 million chips.
If the Apple deal materializes, Intel’s initial revenue impact will be meaningful. Apple reportedly pays TSMC around $45 for each of its A18 chips, with costs expected to rise dramatically for TSMC’s next-generation nodes. Depending on volumes and the amount Apple pays Intel per chip, this potential deal could be worth $1 billion annually for Intel.
Beyond revenue, a major benefit for Intel is the vote of confidence it will receive 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 yields that produce acceptable profit margins. The bigger challenge, though, is winning the trust of potential customers.
Intel previously attempted to build a foundry business more than a decade ago, but the company ultimately abandoned the effort. Apple reportedly considered Intel as a manufacturer for its iPhone chips in 2011, but ultimately chose TSMC. Morris Chang, TSMC’s founder, has said that Apple CEO Tim Cook told him that “Intel just does not know how to be a foundry.”
That perception remains Intel’s most significant challenge as it tries again to become a world-class foundry. Intel CEO Lip-Bu Tan has made listening to customers a key priority, something that Intel has struggled with in the past. That strategy is apparently working as Apple moves toward choosing Intel as a manufacturing supplier.