Intel reaches preliminary chip-making deal with Apple

Apple and Intel have reached a preliminary agreement on chip manufacturing, according to The Wall Street Journal, citing people familiar with the matter.

It's not yet clear which Apple devices the chips would be used in. Talks have reportedly been ongoing for more than a year, with a formal agreement taking shape in recent months.

• According to WSJ, the U.S. government played a key role in bringing Apple to the negotiating table.
• A White House representative confirmed that the administration has been broadly working to support Intel as one of the country's largest domestic semiconductor manufacturers.
• For Apple, the deal would be a way to diversify its production base, which is currently heavily concentrated with TSMC.

The agreement would also be a significant boost for Intel's contract manufacturing business, Reuters reports.

"Landing an Apple contract would give Intel a steady stream of demand from one of the world's largest consumer electronics companies, bolstering both its reputation and a manufacturing business that has fallen behind TSMC in recent years," the agency notes.

The deal comes against a broader backdrop of rising production costs for Apple. Earlier this month, it emerged that memory in upcoming iPhones could become the device's most expensive component, with prices potentially rising fourfold. That shift may force Apple to split its production approach between flagship and base models.