Apple, Intel Reach Preliminary Chip Deal

Apple and Intel have reached a preliminary agreement for the U.S. chipmaker to produce some chips that power the iPhone maker's devices, according to people familiar with the matter cited by The Wall Street Journal.

The deal follows more than a year of intensive negotiations, with the two companies finalizing terms in recent months. Neither firm has disclosed which specific Apple products would use the Intel-manufactured chips, though the agreement involves Intel producing processors based on Apple's designs, similar to the role currently played by Taiwan Semiconductor Manufacturing Co. (TSMC). Apple ships more than 200 million iPhones annually, along with millions of iPads and Mac computers, making reliable chip supply critical.

The U.S. government played a key role in facilitating the talks. Commerce Secretary Howard Lutnick met repeatedly with Apple CEO Tim Cook and other executives over the past year to encourage the partnership. President Donald Trump also advocated directly for Intel during a White House meeting. The government acquired a roughly 10 percent stake in Intel last summer through converted federal grants, bolstering the company's position.