Intel seeking an investment from Apple as part of its comeback bid

Intel also has reached out to other companies about possible investments and partnerships, the people said.

A deal with Apple, a longtime Intel customer that switched to in-house processors in the past five years, would represent further validation of the chipmaker’s turnaround bid. Still, it’s unlikely that Apple would switch back to Intel processors in its devices. The iPhone maker’s most sophisticated chips are now produced by partner Taiwan Semiconductor Manufacturing Co.

A representative for Intel declined to comment. An Apple spokesperson didn’t respond to a request for comment.

Intel Chief Executive Officer Lip-Bu Tan is attempting a comeback with the backing of the federal government. In an unconventional deal brokered by the Trump administration in August, the US acquired a roughly 10% stake in the chipmaker. Intel is seen as a critical piece of efforts to reinvigorate domestic production — a priority for the White House.

Even with financial support, Intel’s challenges remain daunting. The Santa Clara, California-based company has lost its long-held technological edge and ceded market share to rivals such as Advanced Micro Devices Inc. Moreover, Intel has struggled to capitalize on booming sales of artificial intelligence gear — a specialty of Nvidia.

Once the dominant chipmaker, Intel now has a fraction of Nvidia’s sales and market capitalization. It also has laid off workers and delayed factory expansion plans to cope with its deteriorating finances.

Still, investors have grown more optimistic about its prospects since the government infusion. The stock is up more than 60% since the beginning of August.

Under former CEO Pat Gelsinger, Intel set out to become a chip foundry — a business that makes semiconductors for outside clients. But the company has struggled to secure enough customers to support its factory expansion plans.

Intel has continued to pursue the foundry strategy under Tan, though more cautiously. He said in July that Intel would only roll out a new cutting-edge production technique — called 14A — if customers committed to it.

Apple and Intel have a long, sometimes strained history together. Apple used Intel chips in its Macs for years but began shifting away from the supplier in 2020 — part of a broader effort to use more in-house components. Apple also acquired most of Intel’s modem chip business in 2019.

These days, Apple has sought to show that it’s investing heavily in the US — even as much of its production remains overseas. At a White House event in August, the company announced plans to spend $600 billion on domestic initiatives over a four-year period, up from a previous pledge of $500 billion. The centerpiece of the expansion was a $2.5 billion investment in Corning Inc., Apple’s longtime glass supplier.

Apple CEO Tim Cook told CNBC’s Jim Cramer that the investments would encourage other companies to add US production, creating a “domino effect.”

When asked about Intel, he said that competition would be good for the chip foundry industry. “We’d love to see Intel come back,” Cook said.