Robbie Whelan and Rolfe Winkler, reporting for The Wall Street Journal (Apple News+):

Apple and Intel have reached a preliminary agreement for Intel to manufacture some of the chips that power Apple devices, according to people familiar with the matter. 

Intensive talks between the two companies have been ongoing for more than a year, and they hammered out a formal deal in recent months, these people said. Bloomberg News previously reported the talks.

It’s still unclear which Apple products Intel would make chips for, these people said. Apple ships more than 200 million iPhones a year as well as millions of iPads and Mac computers…

President Trump personally advocated for Intel to Cook in a meeting at the White House, according to people familiar with the matter.

“I like Intel,” President Trump said in January. He said the government had made “tens of billions of dollars” from the Intel deal, and that the government’s backing of the company had attracted important partners to Intel.

Intel’s business has been failing for years, even before the transition to Apple silicon, but the divorce with Apple was perhaps the last nail in the coffin for the company. The situation became so dire that the Trump administration effectively bailed out Intel by paying the company all of its appropriated funds from the Biden administration’s Chips and Science Act. This money was intended to be used to build new fabrication plants, or fabs, in the United States, but Intel was in such a desperate position that it just needed the money to survive. It also appointed a new chief executive, Lip-Bu Tan, to turn the company around, after ousting Pat Gelsinger, its last leader.

Tan more or less charmed the Trump administration into liking him, ergo releasing the funds the administration was hesitant to disperse, and the company has slowly been making a comeback. But none of these business dealings has reversed Intel’s slow yet steady product decline. Its x86 processor designs are no longer competitive in the artificial intelligence space. Taiwan Semiconductor Manufacturing Company has been receiving all of that business instead, since it fabricates (produces) processors for Nvidia, Advanced Micro Devices, and Apple — the three biggest processor designers. It only makes sense that Tan, instead of pivoting to an AI-focused chip design strategy that is both slow and likely to fail, is instead investing in Intel Foundry, the company’s fabrication business.

With this deal — and another one signed with Nvidia — end-user products will slowly become less supply-constrained, at least if Intel is able to match demand and quality. (I think it will — Intel’s chip fabs have always been state of the art.) And the deals, if AI-driven demand for Nvidia graphics processing units and Apple silicon chips — in the form of the Mac mini and Mac Studio — continues to skyrocket, might be the panacea Intel has so desperately needed for the decade or so. I could even see Intel’s chip design business slowly winding down to focus efforts more on manufacturing chips for Apple and Nvidia, so long as Intel proves it can produce processors with the yield and efficiency of TSMC, whose 3-nanometer fabrication process is world-renowned. (Qualcomm, the company that makes the Snapdragon mobile processors, once thought of acquiring Intel, to illustrate how dire the company’s design division has become.)

One misconception that ought to be clarified is that neither Intel nor Apple is switching back to x86, Intel-designed processors. That is absolutely not what is happening here — I assume the difference in the TSMC-made chips and the Intel ones in various Macs and iPhones will be negligible. (Apple would insist on it being so. One strike and Intel’s out.) Still, it is quite interesting that it has come to a point where both Nvidia and Apple — especially Apple — feel so constrained by TSMC in the AI era that they felt a need to come to Intel. I fully believe Tim Cook, Apple’s chief executive, is loath to do business with Intel. But the Mac mini and Mac Studio are immensely supply-constrained, and while much of it is due to high demand for memory, processors are certainly part of the issue. Intel, for now, seems like a decent solution. (Intel will probably stick to producing 3-nm processors for older products for a while, as Apple transitions to TSMC’s 2-nm process in the coming months.)