Intel Stock Surges as Apple and Tesla Shift Chip Production to US Foundries to Reinforce Domestic Supply Chains and Next Generation Manufacturing
Shares in Intel rose 14 percent after reports surfaced that Apple signed a deal that could transition a share of its chip manufacturing to Intel's foundries. This development will undoubtedly mark a major reshuffling of the global supply chain for semiconductors, as the Californian technology giant begins to break from its current suppliers. The deal is at the heart of a push to bring chip manufacturing back to the US, according to the industry insider identified as Mobile Chip Expert
on Weibo.
Joining Intel as a significant customer of its next generation silicon would be Tesla. Currently manufactured in partnership between TSMC and Samsung, the 2023 AI5 chip code named Helios
will reportedly move to the Intel foundry for the next iteration, the AI6 chips. Sources familiar with the Tesla effort said that the US government, already holding a controlling interest in Intel, has been actively involved in arranging for the transition, as it aims to move production away from TSMC and into Intel for the AI6 chips.
The allocation of new foundry business is also a highly visible display of the campaign to bring chip manufacturing back to the US. According to analysts, winning the contract business from two of the most significant tech companies in the world could give the current administration with a compelling story to tell voters going into the midterm elections in November. Getting Apple and Tesla into the Intel foundry ecosystem is expected to serve as proof positive that domestic manufacturing policies can lead to success and reinforce a secure US chip supply chain.
For Intel, the ability to bring these two large volume contracts into its foundries is expected to dramatically improve the prospects of the company's contract manufacturing business and the future viability of its manufacturing facilities. With the year winding down, the most significant hurdle is Intel's capacity to manufacture the chips to Apple's and Tesla's quality expectations, and whether government interests and domestic goals can align to guide the success of these high stakes endeavors.
