"Apple and Intel Reach Preliminary Agreement on Semiconductor Production," WSJ

[Financial News]  
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The Wall Street Journal (WSJ) reported on the 8th (local time), citing sources, that Apple Inc. had tentatively agreed to have Intel produce some of the semiconductors used in its devices.
Intel's stock surged more than 15% on the WSJ report, setting a new all-time high.
Bloomberg had previously reported on the 5th that the two companies were discussing semiconductor cooperation.
According to sources, the two companies had been in intensive discussions on the matter for more than a year and reached a formal agreement in recent months.
The sources added, however, that it was still unclear which Apple products would use chips made by Intel.
Apple ships more than 200 million iPhones a year, while its iPad tablets and Mac computers are shipped in the millions.
Intel is accelerating its comeback after the Donald Trump administration last year converted nearly $9 billion in government support into a 10% equity stake.
With the government serving as a kind of safety net through its nonvoting stake, and with the Trump administration's push to secure domestic semiconductor supply chains, major U.S. tech companies are now considering manufacturing chips through Intel.
Tesla CEO Elon Musk reportedly contacted Intel about TeraFab, his plan to build in-house semiconductor production, while NVIDIA Corporation, which dominates the artificial intelligence GPU market, has also stepped in to support Intel.
According to sources, the behind-the-scenes coordinator of these partnerships between Big Tech companies and Intel is United States Secretary of Commerce Howard William Lutnick.
Lutnick is also said to have met several times over the past year with Apple CEO Tim Cook and other senior Apple executives, helping pave the way for cooperation with Intel.
With this agreement with Apple, Intel will be able to manufacture semiconductors for major Big Tech companies, including SpaceX, Tesla and NVIDIA, all of which were introduced by Lutnick.
Intel, once dominant in the CPU market, lost share to AMD and fell behind competitors such as Taiwan Semiconductor Manufacturing Company Limited (TSMC) and Samsung Electronics Co., Ltd. over the past decade amid repeated missteps in technology development.
However, after replacing CEO Pat Gelsinger with Lip-Bu Tan last year, the company has been pushing for a comeback.
In particular, after President Donald Trump converted government support into an Intel stake, the administration has stepped up its backing, accelerating efforts to restore the company's competitiveness.
\r\nExperts said Intel appears to be getting back on track.
\r\nIn an interview with CNBC, Wedbush Securities analyst Dan Ives said the agreement between Intel and Apple was a "victory for the U.S. government." He added that Apple's move to reduce its dependence on TSMC by partnering with Intel was a strategic choice to manage "geopolitical risk."
Patrick Moorhead, founder of Moor Insights & Strategy, told Yahoo Finance that the tentative agreement shows Intel's 18A and 14A processes are beginning to meet the needs of Big Tech.
\r\nMeanwhile, Intel's sharp rally lifted NVIDIA Corporation and Micron Technology, Inc. as well. According to Yahoo Finance, the combined market capitalization of the three semiconductor companies jumped by nearly $100 billion in a single day.
Broadcom Inc. and AMD also surged.
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dympna@fnnews.com Song Kyung-jae Reporter