Intel is reportedly engaged in discussions with Apple about a potential investment from the iPhone maker, as well as opportunities for the two companies to collaborate more closely. However, analysts from Bernstein, including Stacy Rasgon, suggest that such a partnership, particularly beyond mere investment, may not materialize in the near future.
Rasgon pointed out that Apple transitioned away from using Intel’s chips years ago, opting to develop its own Arm-based processors for its personal computers. These chips are now manufactured by TSMC, Intel’s primary competitor in contract manufacturing. Additionally, historical context reveals that Intel once declined to produce chips for Apple’s initial iPhones in the early 2000s, a decision that has continued to influence their relationship.
Citing this background, Rasgon expressed skepticism about the likelihood of Apple and Intel collaborating on chip designs for PCs or shifting its in-house production of PC chips to Intel’s facilities instead of TSMC’s. He remarked that any foundry agreement with Intel appears to be “very premature,” reflecting the complexities and historical decisions that have shaped their operational paths.
Intel, a longstanding leader in designing central processing units (CPUs) for data centers and PCs, has witnessed a decline in its market share in recent years due to increasing competition from AMD and Arm. The company’s internal manufacturing capabilities have reportedly lagged over the last decade, leading to a strategic pivot in 2021 when it began offering manufacturing services to external clients through its Intel Foundry Services. Unfortunately, this initiative has not yielded the desired results, with the service reporting escalating losses—$13 billion in its fiscal year 2024, up from $7 billion in 2023. This financial turbulence contributed to a staggering 60% drop in Intel’s stock value last year.
In a recent development, Nvidia announced that it would acquire a $5 billion stake in Intel, following the U.S. government’s $9 billion investment aimed at revitalizing the faltering company back in August. Rasgon noted that Intel’s critical need is for technological capability, suggesting that mere financial infusion may not suffice in attracting customers and fully utilizing their manufacturing capacity. He emphasized that addressing their capability challenges remains a matter for Intel to handle independently, underscoring the hurdles the company faces in regaining its competitive edge.
