A Potential Apple Partnership Emerges as Intel Bolsters Global Operations

Intel Corporation finds itself at a potential strategic inflection point. Amid a significant capital injection into its Malaysian facilities, market speculation is intensifying around a prospective foundry agreement with Apple Inc. Should the iPhone maker commit to utilizing Intel’s 18A manufacturing process, it would represent far more than a simple revenue increase—it would serve as the crucial validation for Intel’s multi-billion dollar foundry ambitions. The central question remains: is Intel positioned to execute?

The company’s global manufacturing footprint is receiving continued attention. Malaysian Prime Minister Anwar Ibrahim confirmed on Monday an additional investment of 860 million ringgit (equivalent to $208 million) aimed at assembly and testing operations. This capital is destined for a site where Intel has maintained a presence since 1972 and has recently undertaken substantial expansion.

Key elements of Intel’s Malaysian strategy include:
* A $7 billion advanced chip packaging facility, initially announced in 2021.
* A commitment to invest approximately 30 billion ringgit (about $7.3 billion) over a ten-year period.
* An advanced packaging plant in Penang, now reported as 99% complete, representing a 12 billion ringgit investment.
* An allocation of 2.8 million ringgit for educational partnerships and research & development initiatives spanning two years.

This expansion highlights Intel’s broader approach to geographically diversifying its manufacturing capacity—a strategic move gaining importance due to ongoing geopolitical tensions surrounding Taiwan.

Industry Speculation Focuses on a Transformative Apple Agreement

Market researcher Ming-Chi Kuo of TF International Securities has introduced a compelling scenario. He suggests Apple could begin adopting Intel’s 18A process technology for its entry-level M-series chips starting in 2027. The estimated volume is between 15 and 20 million units annually. While this figure represents only a fraction of Apple’s total chip demand, the symbolic value of such a partnership would be immense.

This arrangement would likely affect more affordable iPad and Mac models, with Apple’s premium devices and high-performance chips—accounting for roughly 80% of production—remaining with TSMC. Nevertheless, for Intel Foundry Services, which reported operating losses exceeding $13 billion in 2024, securing Apple as a client would be invaluable. The projected annual revenue of $500 million to $1 billion beginning in 2028 is just one benefit; the greater advantage would be the credibility it lends in attracting other customers concerned about TSMC’s capacity constraints.

Should investors sell immediately? Or is it worth buying Intel?

Intel’s 18A process relies on RibbonFET transistors and PowerVia technology. Mass production is underway at its Arizona facilities, supported by $7.86 billion in funding from the U.S. CHIPS Act.

A Note of Caution: Yield Challenges Persist

Despite technical progress, Intel’s Chief Financial Officer David Zinsner has tempered expectations. He stated that yields for the 18A process are currently "sufficient" but acknowledged they are "not where we need them to be." The operation is not expected to reach full capacity until the latter part of this decade.

In response to broader challenges, Intel is implementing stringent cost-cutting measures. The company aims to reduce non-GAAP operating expenses to $17 billion by 2025 and further to $16 billion by 2026. Its workforce has already been reduced by 15%, and fab expansion projects in Germany, Poland, and Ohio have been postponed or canceled.

Nvidia Partnership Provides a $5 Billion Vote of Confidence

Beyond the Apple rumors, Intel has secured another major partner. Nvidia Corporation is investing $5 billion in Intel, acquiring a stake in the process. Under this agreement, Intel will manufacture x86 chiplets for Nvidia’s AI infrastructure and RTX chiplet-based PCs.

The combination of Malaysian expansion, a potential Apple deal, and the solidified Nvidia partnership signals a renewed sense of confidence from the industry in Intel’s trajectory. Whether this confidence is justified will ultimately depend on the company's ability to rapidly elevate its manufacturing processes to a competitive level.