Shares of Intel Corp. closed 10% higher today following a report that it may win a contract to produce chips for Apple Inc. devices.

Prominent Apple analyst Ming-chi Kuo wrote on X that reports of the potential deal have been swirling in the semiconductor industry for some time. “Visibility around this had remained low,” Kuo wrote. “My latest industry surveys, however, indicate that visibility on Intel becoming an advanced-node supplier to Apple has recently improved significantly.”

The iPhone maker is expected to entrust Intel with the production of its M system-on-chip series. The processors power the iPad Pro and entry-level MacBook Air. The newest chip in the series, the M5, includes a central processing unit and a graphics processing unit that both contain 10 cores.

Intel is expected to start making chips for Apple as soon as the second quarter of 2027. The company will reportedly use its cutting-edge Intel 18A manufacturing process, which entered mass production earlier this year.

A processor includes not only transistors but also other types of circuits, notably capacitors. Those are tiny electric components that can store energy for a limited amount of time. Chips use them for tasks such as mitigating power fluctuations that may interfere with processing.

Intel’s 18A node introduces a new capacitor design the company calls Omni MIM. Each Omni MIM capacitor comprises a thin layer of insulating, or nonconductive, material sandwiched between two layers of metal. Intel says that the technology mitigates voltage fluctuations more effectively than its earlier circuit designs.

The 18A node further reduces unwanted voltage changes using a technology called PowerVia. Processors include a complex network of microscopic wires that deliver electricity to their transistors. PowerVia places those wires below the transistors, a departure from the usual approach of stacking them atop a chip.

According to Kuo, Intel has provided Apple with a so-called PDK for 18A. A PDK is a collection of tools that engineers can use to optimize their chip designs for a new manufacturing process. It’s believed that the research work Apple has carried out with the PDK so far met its expectations.

The iPhone maker is believed to be using a variant of 18A called 18-A. According to Intel, it provides better power efficiency than the standard version.

A contract with Apple could provide a major boost for the chipmaker’s struggling foundry business, which has weighted down on its earnings in recent quarters. Kuo stated that the iPhone maker shipped 20 million devices equipped with M chips this year. It’s expected to sell between 15 million and 20 million units in 2027, the year Intel is expected to start producing the processor series. 

Photo: Intel