Key Takeaways
- Apple is in preliminary discussions with Intel and Samsung about manufacturing primary device processors domestically
- No orders have been finalized; discussions remain in exploratory phases
- CEO Tim Cook highlighted processor supply limitations during the company’s recent Q2 earnings report
- Partnering with Intel may enhance Apple’s standing with the Trump administration, which supports the chipmaker
- TSMC in Taiwan remains Apple’s primary chip supplier, with 100 million units expected from its Arizona facility by 2026
According to a Bloomberg report released Tuesday, Apple is investigating the possibility of having Intel and Samsung produce its core device processors on American soil. These discussions are in nascent stages with no manufacturing contracts signed to date.
Shares of Apple remained relatively flat during Tuesday’s premarket session. Intel’s stock jumped as high as 4% following the announcement, while Samsung’s shares on the Korean exchange climbed more than 5% before the market closed.
For over ten years, Apple has depended on TSMC for chip fabrication. TSMC’s Taiwanese manufacturing plants produce cutting-edge 3-nanometer processors that run the newest iPhone and Mac models.
The challenge? Available supply is constrained. Surging demand from artificial intelligence data centers has reduced chip availability, while sales of AI-powered Mac computers exceeded Apple’s projections.
During last week’s Q2 FY26 earnings conference call, CEO Tim Cook acknowledged that processor shortages are actively limiting the company’s expansion. “We’re operating with less supply chain flexibility than our typical capacity,” he stated.
Cook identified advanced chip availability — rather than memory components — as the primary constraint. The Mac mini and Mac Studio product lines have experienced the most significant impact. “I expect it will require several months before we achieve equilibrium between supply and demand,” he explained.
Apple representatives have toured a Samsung manufacturing site currently under construction in Texas designed for advanced chip production. Regarding Intel, preliminary discussions about utilizing its foundry operations have occurred.
The Strategic Value of Intel and Samsung
Securing Apple as a foundry client would represent a significant achievement for Intel. CEO Lip-Bu Tan is working to revitalize Intel’s manufacturing division following prolonged challenges. Winning Apple’s business could serve as validation to attract additional customers.
While Samsung ranks as a distant runner-up to TSMC in foundry services, Apple’s endorsement would significantly boost its credibility. Samsung currently supplies various iPhone components, including power management chips.
Political considerations also factor into Apple’s calculus. The Trump administration has positioned Intel as America’s semiconductor manufacturing leader, and certain Apple executives believe collaboration could strengthen ties with Washington.
However, Apple harbors legitimate reservations. Neither Intel nor Samsung currently matches TSMC’s manufacturing consistency or production capacity. Apple may ultimately maintain its TSMC partnership without pursuing either alternative.
Apple’s Component Sourcing Approach
Apple’s strategy typically involves maintaining at least two suppliers for critical components, providing negotiating power and protection against supply interruptions.
Taiwan presents particular vulnerabilities. Cook has consistently identified the island’s concentration of chip manufacturing as a strategic concern, particularly given Beijing’s territorial assertions.
TSMC is currently building capacity in Phoenix, Arizona. Apple expects to receive 100 million processors from that location in 2026 — though this represents merely a portion of its yearly device production requirements.
The iPhone 17 Pro series has also encountered supply chain challenges. Apple has deployed operations teams to prevent constraints from affecting AirPods and Apple Watch manufacturing.
Wall Street analysts assign TSMC a Strong Buy rating, Apple and Samsung receive Moderate Buy ratings, while Intel holds a Hold rating as experts track its recovery efforts.
