Intel’s (INTC) stock price rose more than 8% on Tuesday after TF International analyst Ming-Chi Kuo posted on X Friday that the company is expected to begin building Apple’s (AAPL) M series chips for its MacBook Air and iPad Pro as soon as early 2027.
If Kuo’s report holds true, the move would represent an enormous vote of confidence for Intel, which has struggled to secure customers for its third-party chip manufacturing business. The segment, which generated $4.2 billion in revenue in its latest quarter, compared to the $12.7 billion the company’s product business pulled in, primarily relies on revenue from manufacturing Intel’s own chips.
While Kuo notes that the team-up won’t quite yet allow Intel to compete with TSMC (TSM), which currently supplies Apple’s chips, it would show that the company has the ability to build and provide chips to high-profile customers.
According to the analyst, Apple will use Intel’s upcoming 18A-P process technology for the chips, which promises improved performance compared to its current 18A technology.
Read more about Intel’s stock moves and today’s market action.
Apple previously used Intel’s chips in its laptops and desktops before switching to its own chip designs that are manufactured by TSMC. The new chips would still use Apple’s designs but Intel’s processing technologies.
Shares of Intel have soared 116% year to date and 113% over the past 12 months, following the ouster of former CEO Pat Gelsinger and installation of current CEO Lip-Bu Tan.
Intel has also gotten a number of high-powered backers, including the US government, which has become the company’s largest shareholder, owning some 10% of the chipmaker despite President Trump initially insisting Tan step down from his role as CEO over his investments in Chinese tech firms.
In addition to the government, Nvidia (NVDA) and SoftBank have pumped a combined $7 billion into Intel via their own investment deals.
Intel, however, is still well behind the likes of Nvidia and Advanced Micro Devices (AMD) in the ongoing AI race, which has turned Nvidia into the largest publicly traded company, with a market capitalization exceeding $4.4 trillion.
That said, Intel has seen some wins lately, including getting chips based on its 18A technology out the door after a series of delays.
At the same time, poor business decisions in prior years have put Intel’s sales lead in the consumer and data center CPU spaces at risk as AMD continues to steal market share.
During AMD’s Financial Analyst Day in November, CEO Lisa Su said she believed the company would capture 50% of data center CPU market share revenue over the next three to five years. Su said she believes AMD will also grab more than 40% of client revenue market share, which includes chip sales for consumers and gaming.
Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter at @DanielHowley.
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