The companies were engaged in intensive talks for more than a year and they hammered out a formal deal in recent months, the report said, citing people familiar with the matter, News.az reports, citing Reuters.
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Intel stock extended gains to rise 15% on the news, while Apple (AAPL.O), opens new tab shares were up about 1.7% in afternoon trading.
Landing an Apple contract will give Intel a steady stream of demand from one of the world’s largest consumer electronics companies, bolstering both its reputation and a manufacturing business that has fallen behind TSMC in recent years.
The Journal report said that the U.S. government, which became Intel’s largest shareholder last year under a deal with its CEO Lip-Bu Tan, played a major role in bringing Apple to the negotiating table.
It is unclear which Apple products Intel would make chips for, according to the report. Apple and the White House did not immediately respond to Reuters’ requests for comment; Intel declined to comment.
For Apple, a deal with Intel could mean a diversification in manufacturing, giving it the ability to secure more capacity as it has been beholden to extremely tight capacity at TSMC (2330.TW), opens new tab.
At its most recent earnings, Apple CEO Tim Cook said iPhone sales were held back by supply constraints at its contract manufacturer.
TSMC is the world’s largest contract chipmaker and makes advanced wafers for AI firms such as Nvidia (NVDA.O), opens new tab and AMD (AMD.O), opens new tab, but the swelling demand has made securing chip capacity extremely difficult.
