Intel shares jump after WSJ reports Apple in prelim chip-making deal
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The news: Intel shares jumped over 19% to a record high after The Wall Street Journal reported citing unnamed sources that Apple struck a preliminary deal for the US chipmaker to manufacture some of its chips.
The numbers: Intel shares rose to as much as USD130.57 before paring some gains to be 15% higher in the afternoon. Apple shares rose about 2%.
The context: Intensive talks had been under way for more than a year before the companies formalised the agreement in recent months, the Journal said. It remains unclear which Apple products Intel would supply chips for.
The Trump administration played a key role in brokering the deal, the report said. Commerce Secretary Howard Lutnick repeatedly met Apple CEO Tim Cook and others over the past year to push them toward Intel, while President Trump personally advocated for the deal to Cook at the White House. The US government last summer converted nearly USD9 billion in federal grants into a 10% stake in Intel.
The agreement comes as Apple faces a chip supply crunch. On its last two earnings calls, Cook blamed insufficient chip availability for the company’s inability to meet iPhone demand. Apple currently relies on Taiwan Semiconductor Manufacturing, but skyrocketing demand from Nvidia and other AI chip designers has eroded Apple’s leverage with its long-standing supplier.
The source: The Wall Street Journal
