Intel stock fell Monday, giving up gains from Friday's 10% surge triggered by analyst predictions of a major Apple manufacturing deal. The volatility highlights investor uncertainty around Intel's foundry business prospects as the chipmaker battles to regain relevance in the mobile processor market it once dominated.
Intel just experienced the kind of whipsaw trading that perfectly captures the company's precarious position in today's chip wars. After surging 10% Friday on analyst speculation about landing Apple as a foundry customer, shares retreated Monday as reality set in about the deal's actual scope and timeline.
The catalyst came from TF International Securities analyst Ming-Chi Kuo, who posted on X that his "latest industry surveys indicate that visibility on Intel becoming an advanced-node supplier to Apple has recently improved significantly." According to Kuo's analysis, Intel could begin shipping Apple's lowest-end M processors as early as Q2 or Q3 2027.
But here's the reality check that likely drove Monday's selloff - this wouldn't exactly be the blockbuster win Intel desperately needs. Kuo was careful to emphasize that "order volumes for the lowest-end M processor are relatively small and virtually no material impact on TSMC's fundamentals or its technology leadership over the next several years."
TSMC currently manufactures all of Apple's silicon for iPhone, iPad, and Mac products, and Kuo expects Apple to remain "highly dependent" on the Taiwanese giant's advanced nodes for the "foreseeable future." The potential Intel partnership would essentially give Apple a backup supplier for its least critical chips - hardly the game-changing relationship investors initially priced in.
The timeline also depends heavily on Intel executing flawlessly. Kuo noted the partnership hinges on Intel releasing its process design kit - essentially the blueprint Apple's engineers need to build chips - expected in early 2026. Given Intel's recent track record with manufacturing delays, that's no guarantee.
"Apple is a potential major reference customer whose presence validates Intel's high-performance foundry offering," Paul Markham, investment director at GAM Global Equities, told CNBC. "If Intel pulls it off, there is potential to win higher volume and value business from Apple, for example CPU production for the iPhone."