(June 19): Intel Corp’s stock surged on Thursday after US President Donald Trump said the chipmaker will work with Apple Inc to design and produce semiconductors domestically.
Trump didn’t elaborate on the tie-up, which he mentioned after championing Nvidia Corp and Elon Musk’s Terafab chipmaking ambitions in a Truth Social post. The iPhone maker has held exploratory discussions about using Intel and Samsung Electronics Co to produce the main processors for its devices in the US, Bloomberg previously reported.
“I decided to help Intel because we need to design and build our Chips right here in America,” Trump posted. “Apple has agreed to work with Intel to design and build its Chips in America.”
Shares of Intel jumped as much as 12% to a record of US$135.48 in New York trading on Thursday. Apple’s stock rose as much as 1.6%.
Intel declined to comment, while Apple didn’t immediately respond to a request for comment.
For Intel, finding external customers for chip production is a key piece of a comeback plan under chief executive officer Lip-Bu Tan. The company remains in the early stages of trying to line up clients for its so-called foundry business after past false starts. Landing Apple as a customer would represent a massive win for Tan and potentially help attract additional new business.
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Apple, which relies heavily on Taiwan Semiconductor Manufacturing Co (TSMC) for chip production, would get an additional supplier under such an arrangement. That might help alleviate supply shortages that are forcing up component and device prices.
Any work the two companies do together might be incremental to start off with, according to analysts. Intel has yet to prove that its factories can match the output of TSMC’s facilities in advanced manufacturing.
“Intel will of course have to prove their mettle before being granted more substantial wins, but the first step is always the hardest, so at least they appear to be taking that step,” Bernstein analyst Stacy Rasgon said in a research note. “We suspect any early foundry relationship would likely be low-volume, less important parts.”
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Intel struck an unconventional deal with Trump last year that turned the US government into one of Intel’s biggest investors. Under that agreement, Intel sold a stake worth nearly 10% in exchange for state support.
Intel’s Tan, who took the reins in March of last year, also has attracted investments from Nvidia and SoftBank Group Corp.
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