Apple and Intel have reached a preliminary agreement for Intel to manufacture some of the chips used in Apple devices, according to sources familiar with the matter, as reported by The Wall Street Journal, UNN writes.
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Intensive negotiations between the two companies lasted for over a year, and they reached a formal agreement in recent months, these sources said.
It remains unclear exactly which Apple products Intel will produce chips for, the sources added. Apple ships more than 200 million iPhones annually, as well as millions of iPads and Mac computers.
Intel has two main lines of business: chip design and manufacturing—both of its own designs and those of third-party customers—within the Intel Foundry division. Both divisions had demonstrated poor performance for years before Lip-Bu Tan took over as CEO last spring, promising to revitalize them.
Last summer, the Trump administration struck a deal to convert nearly $9 billion in federal grants into Intel stock, giving the U.S. government a 10% stake in the chipmaker. This played a key role in bringing Apple to the negotiating table.
According to sources familiar with the situation, U.S. Commerce Secretary Howard Lutnick has met repeatedly over the past year with high-ranking Apple representatives, including CEO Tim Cook, as well as SpaceX head Elon Musk and Nvidia CEO Jensen Huang, in an effort to persuade them to begin collaborating with Intel. Following the deal with Apple, Intel has entered into partnership agreements with all three companies.