Apple and Intel Strike Preliminary Chip-Making Deal Backed by $9 Billion Federal Grant

Apple and Intel have reached a preliminary agreement for Intel to manufacture chips for Apple devices, according to The Wall Street Journal. The arrangement comes with substantial federal backing: the U.S. government has provided a $9 billion grant connected to the chip manufacturing agreement.

This marks a striking reversal. For most of the past 15 years, Intel made the processors inside Apple's Macs. But Apple began designing its own chips—called the M-series—starting in 2020, and has relied heavily on Taiwan Semiconductor Manufacturing Company (TSMC) to actually build them. Now, Intel wants a chance to manufacture Apple's custom silicon.

Intel's Bid to Compete as a Chip Manufacturer

For the past several years, Intel has pursued a major strategic shift. Instead of only making its own chips, the company wants to become a foundry—a manufacturer that builds chips designed by other companies. This strategy, launched in 2021, pits Intel directly against TSMC and Samsung, which already dominate this business globally.

Intel has spent billions building new manufacturing plants in Arizona, Ohio, and other locations to support this foundry business. The company has also invested heavily in developing advanced manufacturing techniques, including a process called Intel 18A, expected to arrive in 2025.

The preliminary agreement suggests that Apple and Intel are still negotiating the specific details: which chips Intel will make, how many, and by when.

Why Apple Might Diversify Its Chip Suppliers

Currently, TSMC manufactures the vast majority of Apple's custom chips—both the A-series processors in iPhones and iPads, and the M-series in Macs. This arrangement has worked well, but it does carry a risk. If something disrupts TSMC's operations—whether a geopolitical event, a natural disaster, or supply shortages—Apple could face serious production problems.

By potentially adding Intel as a second source for some chips, Apple gains insurance. It can spread its production across two manufacturers rather than depending almost entirely on one.

The Federal Government's Role

The $9 billion grant appears to come from the CHIPS and Science Act, a Biden administration program that allocated $52 billion total to support semiconductor manufacturing and research within the United States. The policy reflects a broader concern among U.S. officials: the country has become too dependent on Asian chip manufacturers, and that dependence creates vulnerabilities, especially given ongoing geopolitical tensions and the supply chain disruptions that emerged during the COVID-19 pandemic.

Intel has been the primary beneficiary of this federal support, receiving backing for multiple manufacturing projects at home. The company's foundry ambitions have aligned closely with these government priorities.

The broader context here is worth noting. We have seen similar federal investment in critical technologies during earlier periods of international competition—from Cold War-era spending on semiconductors and space exploration to defense research that built the internet's foundational systems. The current effort to rebuild domestic chip manufacturing follows a comparable playbook: the government provides capital to develop capability that will reinforce national technological strength and reduce dependence on potential rivals.

What This Could Mean for the Wider Industry

If Intel successfully produces advanced chips for Apple at significant scale, it would show that the company can genuinely compete with TSMC and other Asian foundries. That proof-of-concept could matter beyond Apple. Amazon, Google, Microsoft, and other technology giants are designing their own custom chips, and they too worry about concentrating production in Taiwan or South Korea. They may look to Intel as a domestic alternative.

At the same time, the success of this partnership depends on Intel solving a real technical challenge. The company currently lags TSMC in manufacturing advanced processors. Whether Intel can close that gap and deliver chips that meet Apple's exacting standards remains an open question.

The specific chips Intel will manufacture for Apple are still unclear. Apple's current lineup ranges from relatively simple chips for accessories to cutting-edge processors that push the limits of manufacturing technology. The $9 billion grant suggests the deal involves either significant production volumes or the most advanced manufacturing processes—or both—since federal subsidies typically go toward projects that create jobs, build domestic capacity, and advance the state of the technology.

What Happens Next

In the months ahead, watch for Intel to announce details about which manufacturing plants will handle Apple's orders, and which specific chip designs Intel will build. Those announcements will reveal how ambitious this partnership truly is.

More broadly, the combination of a major customer commitment and substantial federal funding is creating conditions in domestic semiconductor manufacturing that haven't existed in decades. If Apple and Intel succeed here, other semiconductor companies may follow, reshaping where advanced chips are manufactured for the next generation of devices.