Intel shares fly on Apple chip deal report. Here's why it's a big deal

Key Points:

• Apple and Intel are nearing a deal for Intel to manufacture some chips for Apple's devices, marking a significant shift as Apple currently relies solely on Taiwan Semiconductor Manufacturing Co. (TSMC).
• Intel's foundry business, previously struggling with delays and low yields, is now ramping up capacity with advanced chip fabrication plants in Arizona, producing chips on its 18A node and preparing for the improved 18A-P node expected next year.
• The partnership would validate Intel as a credible second source for Apple's chip production amid soaring demand for AI chips, while TSMC faces capacity constraints despite being Apple's largest chip supplier after Nvidia.
• Intel's foundry business also has future commitments, including Elon Musk's planned Terafab using Intel's 14A node by 2029, and currently serves major customers like Amazon and Cisco for advanced chip packaging.
• While the Apple-Intel deal won't significantly impact TSMC's current wafer production limits, TSMC acknowledges Intel as a formidable competitor, reflecting increasing competition among the few companies capable of advanced chip manufacturing, including Samsung.