Trump says Apple to partner with Intel on US chip design, production (updated)

Intel

Yesterday 05:54

Rewrites throughout, updates share movement in paragraph 4

    June 18 (Reuters) - Apple AAPL.O has agreed to work with Intel INTC.O to design and manufacture its chips in the U.S., President Donald Trump said on Thursday, in what would be a major boost for the American chipmaker's efforts to turn around its business. 
An Apple contract would lock in steady demand from one of the world's largest consumer electronics companies, boosting Intel's reputation and sales as it looks to close the gap with rival TSMC 2330.TW - the world's biggest contract chipmaker.
For Apple, the deal would help diversify its manufacturing base and add chip capacity at a time when its key partner TSMC has been stretched thin by surging demand from AI chipmakers such as Nvidia NVDA.O and AMD AMD.O.
Apple and Intel did not immediately respond to Reuters requests for comment. Intel shares rose 7% to a record, set to add to their threefold gain so far this year, while Apple was up 0.8%.
Intel reached a preliminary deal to make some chips for Apple after more than a year of discussions, the Wall Street Journal reported in May.
Trump did not specify which chips Intel would make for Apple in the Truth Social post about the agreement. He said it was his latest effort to help Intel, in which the U.S. government has a 10% stake, after pushing for deals with Nvidia and Tesla. 
Intel supplied processors for Mac laptops for around 15 years until 2020, when Apple switched to its in-house M-series chips manufactured by TSMC. The M-series has been credited with boosting Mac sales since the switch.
In April, Intel landed Tesla TSLA.O as the first major customer for its next-generation 14A manufacturing process, which is expected to enter mass production in 2029.
Last year, Trump had called for the resignation of Intel CEO Lip-Bu Tan over his ties to China before announcing a deal that made the U.S. government the biggest shareholder in the chipmaker.
Trump had earlier said he "should have asked for more" of a stake in Intel, eight months after the government's Intel position grew to be worth more than $50 billion.
The administration has been stepping up efforts to secure U.S. supply chains for critical minerals and semiconductors, including taking equity stakes in companies to reduce reliance on China.
              

(Reporting by Aditya Soni and Anusha Shah in Bengaluru; Editing by Sherry Jacob-Phillips and Arun Koyyur)
((AnushaDevang.Shah@thomsonreuters.com;))