Apple taps Intel to manufacture some in-house chips

Apple and Intel announced a manufacturing agreement under which Intel will produce some of Apple’s in-house processors at Intel’s semiconductor fabrication facilities. The companies did not disclose financial terms, the specific product lines covered or a timeline for volume production.

Apple will continue to design its own system-on-chips while Intel supplies wafer fabrication capacity and process expertise. The arrangement is a manufacturing services pact rather than a technology license: Apple retains control of chip design and Intel provides the foundry work.

Apple has relied primarily on Taiwan Semiconductor Manufacturing Co. for A-series and M-series chips used in iPhones and Macs. The new agreement provides an additional production partner as Apple manages capacity needs and supply-chain risks.

Intel has been expanding its foundry operations in recent years, investing in new fabs and upgrades in the United States and Europe. Microsoft, Amazon and Tesla are among external customers that have engaged Intel to produce specialized chips. Adding Apple brings another large chip designer to Intel’s external customer roster and increases Intel’s exposure to mobile and consumer compute processors.

Industry executives said the agreement could help Apple secure additional wafer capacity and give Intel higher-volume production runs to validate its manufacturing processes. Analysts note that large chip orders typically require lengthy qualification and testing cycles before full-scale production, so several months of engineering work are likely before any Intel-built Apple chips appear in consumer products.

Intel has promoted its latest process nodes and advanced packaging techniques to attract outside customers and compete with established contract manufacturers. Apple has diversified suppliers for other components in the past and placing some chip volume with Intel follows that pattern of spreading manufacturing sources.

The two companies provided no timetable for when fabricated chips would enter devices, and details about which Apple processors will be made at Intel facilities were not released.