Return of the Apple-Intel Partnership? The Hidden Implications of M-Series Chip Production Negotiations
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Recent predictions by Apple analyst Ming-Chi Kuo have caused a stir in the semiconductor industry. He suggests that Intel is likely to start producing Apple’s M-series chips from the second to third quarter of 2027. This development holds significance beyond a simple change of supplier.
Reflecting on the relationship between Apple and Intel, it’s been quite complex. Until 2020, MacBooks and iMacs used Intel processors, but following the launch of the M1 chip, Apple fully transitioned to its own designed chips. By 2023, the two companies were essentially separated. Now, there is a possibility of them collaborating again.
According to analyst Ming-Chi Kuo, Apple and Intel have recently signed a non-disclosure agreement (NDA) to discuss the production of M-series chips. However, it seems Intel will handle previous generation M-series chips used in budget models, rather than the latest M5 or next-generation chips. This is a realistic approach considering Intel’s current foundry technology capabilities.
Behind these moves lies the ‘Revival of American Manufacturing’ policy from the Trump administration, with a strong focus on fostering semiconductor manufacturing. In August, the federal government even agreed to acquire about 10% of Intel’s shares, becoming its largest shareholder. In this context, Apple’s announcement of a $100 billion (approximately 140 trillion won) investment in the U.S. is likely not a coincidence.
The Strategic Need to Reduce TSMC Dependency
Currently, Apple’s M-series chips are exclusively produced by TSMC, which holds a dominant 60% share of the global foundry market. However, such a monopolistic dependency structure inherently carries risks, including geopolitical risks in Taiwan, natural disasters, and supply chain disruptions.
In fact, the global semiconductor shortage in 2021 made many companies realize the importance of diversifying their supply chains, and Apple was no exception. It needed to move away from its reliance on TSMC to mitigate risks.
However, there aren’t many companies capable of replacing TSMC in the foundry market. Samsung Electronics is the second-largest player but only holds about a 17% market share. Following them are GlobalFoundries (7%) and SMIC (6%), but there is a significant gap in technology and production scale compared to TSMC. Intel’s foundry business currently holds less than 1% market share, which is minimal.
Yet, if Intel takes on the production of Apple chips, the situation could change. Securing a major client like Apple could simultaneously enhance Intel’s technology and expand its production scale. For Intel, this could be a turning point for the growth of its foundry business.
Changes in the Global Foundry Competitive Landscape
If the Apple-Intel negotiations succeed, significant changes in the global foundry market are anticipated. TSMC’s monopolistic position could see some cracks. Although Apple won’t move all chip production to Intel, the symbolic significance is substantial.
Samsung Electronics is also in a tense situation. It has been targeting Apple as the next partner after TSMC, but Intel has taken the first step. Samsung is currently expanding its foundry production capabilities in Pyeongtaek and Hwaseong, but a full-scale collaboration with Apple has yet to materialize.
Particularly noteworthy is the competitive landscape by technology node. Currently, TSMC leads the cutting-edge 3nm process, with Samsung Electronics in pursuit. Intel is working on developing the Intel 18A (1.8nm class) process but is not yet in mass production. Therefore, starting with the production of previous generation Apple chips seems to be a realistic approach.
According to market research firm Gartner, the global foundry market size is estimated to be around $120 billion in 2024. Of this, TSMC accounts for about 60%, roughly $72 billion. If Apple shifts even 20-30% of its M-series chip production to Intel, it could result in a movement of several billion dollars in annual volume.
The domestic semiconductor industry is also likely to be affected. Samsung Electronics has put in significant effort to secure Apple foundry orders, and if Intel achieves results first, a strategic reassessment may be necessary. However, Samsung’s strength lies in its ability to supply both memory and foundry, so leveraging this for a differentiated strategy will be important.
SK Hynix, while not a direct competitor, could be indirectly affected by changes in the overall semiconductor supply chain. Especially in the AI semiconductor market, where it competes with Intel, the strengthening of Intel’s foundry business could have long-term implications.
Personally, I believe this move holds significance beyond a simple supplier change. It is connected to macro trends such as the U.S. semiconductor self-sufficiency policy, the technological hegemony competition with China, and supply chain security. The timing of 2027 is also significant, as it coincides with when the effects of the U.S. CHIPS Act investments are expected to fully manifest.
Of course, nothing is confirmed yet. Analyst Ming-Chi Kuo’s predictions are not always accurate, and there are many hurdles to overcome, such as technical verification and quality testing, before mass production. However, the direction seems clear. The global semiconductor supply chain is being reshaped by geopolitical factors, presenting new opportunities and challenges simultaneously.
It will be important to watch how these changes unfold over the next few years. For the Korean semiconductor industry, this situation could be both a crisis and an opportunity, making strategic responses even more crucial.
This article was written after reading the Semiconductor Insight article, with additional personal opinions and analysis.
Disclaimer: This blog is not a news outlet, and the content reflects the author’s personal views. The responsibility for investment decisions lies with the investor, and no responsibility is taken for investment losses based on the content of this article.
