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Intel (INTC) has held talks with Apple (AAPL) about manufacturing its (ARM-based) A-series...

  • Thursday, March 7, 9:38 AM ET
    Intel (INTC) has held talks with Apple (AAPL) about manufacturing its (ARM-based) A-series mobile processors, a "source close to one of the companies" tells Reuters. The rumor comes shortly after Intel landed Altera as a client, and a report it had landed Cisco. Intel's manufacturing process edge - whereas TSMC/Samsung are at 28nm, Intel is at 22nm - could appeal to Apple. Reports have been around for a while that Apple is thinking of using its A-series chips in Macs, instead of Intel CPUs.
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This news story has 29 comments:

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    I have ignored these intel/apple rumors for a while now, but if they did make an agreement for intel to manufacture apples chips I wonder what that would do to intels share price...
    7 Mar, 09:43 AM Reply Like
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    It would add significantly to future EPS projections and the stock would gap up substantially.
    7 Mar, 09:44 AM Reply Like
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    But this rumor is really contradictory to anything Otellini said about foundry deals... A-series, manufactured by Intel, replacing Intel chips...
    7 Mar, 09:49 AM Reply Like
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    Clearly it would be a positive catalyst. The article also stated Intel could receive about 4.2B in revenue with a gross margin of about 50% by 2015. This would provide about 2B in cash flow for Intel. However, there are always opportunity cost that would go along with all business arrangements; so the added 2B is only accurate if Intel has absolutley nothing else to fab in its foundries.
    7 Mar, 09:53 AM Reply Like
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    Otellini on the way out and INTC potentially moving in new direction.
    7 Mar, 09:55 AM Reply Like
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    So how does replacing your own chips with the manufacturing of someone else's chips increase EPS? Can't imagine the the margin would be higher.
    7 Mar, 10:38 AM Reply Like
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    Apple won't put A-series in Macs.
    7 Mar, 10:40 AM Reply Like
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    I would love for this to happen, it would be great for both companies. Intel badly needs the revenue, and Apple would gain a reliable best in class supplier.

    Intel would gain over $4B in revenue, increase ROA dramatically, stabilize cash flow with consistent margin very high volume orders from Apple.

    With Otellini leaving, perhaps Intel will be more agile, more flexible and less arrogant, which would be great for the bottom line. They need pick a little of the low hanging fruit and get their profits up. Their stock could easily add a point or two, perhaps soaring to the mid $22 range.
    7 Mar, 10:50 AM Reply Like
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    ......"Intel badly needs the revenue....."

    - How badly? As bad as AMD needs revenue? Judging from the 41% payout ratio, the 4+ dividend, and the $6B to buy back shares (at under 3% loan rate, tells me the banks TOTALLY trust INTC), tells me INTC doesn't need revenue 'badly'. They are doing find for now, and can meet the expanding CapEx.

    ......"With Otellini leaving, perhaps Intel will be more agile, more flexible and less arrogant, which would be great for the bottom line.".....

    - How does less arrogance translate into a better bottom line? Maybe you are mistaking arrogance for confidence?
    7 Mar, 12:28 PM Reply Like
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    Stockgal, agreed. I would love to see this union.

    Now lets hope they strike a partnership with the Web TV thingie :)
    7 Mar, 08:06 PM Reply Like
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    Hmmm. They would need really good x86 emulation. Bootcamp would be booted which I think might be a non-starter. Way too many folks I know are using Macs as "enhanced" PCs.
    7 Mar, 10:01 AM Reply Like
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    My Intc core holding finally went positive today. I hope this rumor proves to be true. Until then I'll collect the 4%+. Keep the news coming! Long Intc!!!
    7 Mar, 10:18 AM Reply Like
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    So what is in it for Apple?
    7 Mar, 10:59 AM Reply Like
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    Faster/more power-efficient chips, if Intel can keep its manufacturing edge.
    7 Mar, 11:05 AM Reply Like
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    Plus less reliance on and revenues paid to their hated rival Samsung, who fabs Apple's ARM processors today. They could accomplish this with others than Intel, but they have an existing relationship with Intel and Intel has more than sufficient capacity to ensure they can always meet Apple's demand.
    7 Mar, 01:43 PM Reply Like
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    If this notice became true it is positive for Intel in the near term. But I would not like to see Intel transformed too much in a foundry business, rather a inovation leader in the computing space as It has used to be. Intel must take the lead in the mobile computing revolution with their only inovative products!
    7 Mar, 11:20 AM Reply Like
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    There's nothing new here. It's the same old rehash of old rumors.

    My news feed has 6 articles from major news agencies, all based on pure unfounded speculation and referencing each other.

    Must be a slow news day so they have to make things up.
    7 Mar, 11:40 AM Reply Like
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    I can't believe Intel would be stupid enough to mfr ARM chips for Apple--outside of Apple paying a ridiculous price for them. Intel may as well throw in the towel and admit they will never make it on their own in phones. If they can't engineer a better phone processor the handwriting is on the wall anyway. It is just a matter of time until Intel becomes past tense...
    7 Mar, 12:35 PM Reply Like
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    They won't. This rumor is bogus.
    7 Mar, 12:37 PM Reply Like
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    I suspect somebody at Apple dropped this to help with TSMC or Samsung negotiations. CPU supplies are a large and unnoticed risk for Apple. Samsung is boiling over and TSMC knows Apple has very few options. The pressure looks to be on Apple to me.
    7 Mar, 12:46 PM Reply Like
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    The only way I could see this happening is if it was to ease the transition for Apple from ARM to x86, say for like a year while they port everything over.

    As far as the rumor, it just says "talks" which I'm sure have happened. Probably went something like:

    Apple: PLEEEEEASE!!
    Intel: No, it buys x86 or it gets the hose again
    7 Mar, 12:57 PM Reply Like
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    lol at "No, it buys x86 or it gets the hose again"
    7 Mar, 01:03 PM Reply Like
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    Humble Eagles

    "The pressure looks to be on Apple to me"

    I agree. If TSMC stumbles on 20nm, which is certainly a possibility, Apple would be in a real pickle. How could they leave themselves without a backup plan?
    7 Mar, 01:10 PM Reply Like
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    How much capacity would manufacturing Apple's chips consume though? Doesn't Intel have excess capacity they could use?

    Why does it need to be either/or? Can't Intel continue to innovate, build their own pones and whatnot and still fab Apple's chips?
    7 Mar, 08:11 PM Reply Like
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    Hey Ashraf, if that is the case and if Apple is getting ready to ramp up 20nm with TSMC (didn't know they had a stable 20nm process), then where does it leave Intel?!
    15 Mar, 04:11 AM Reply Like
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    Exactly, ephud. After 28nm, nobody has a 3D alternative besides Samsung and possibly GloFo. Both of those are very iffy. Getting to Trigate successfully is a huge deal and I doubt Intel will give that advantage away without Apple parting with a huge pile of their cash. Apple could go with QCOM as an alternative, or they can buy Intel. QCOM will likely have production somewhere else, but it will be subject to the same problems. I see this as a big risk for Apple moving forward. They are projected to need hundreds of millions of CPUs a year! Apple's supply chain in general is becoming quite a risk.
    7 Mar, 01:18 PM Reply Like
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    Humble Eagles

    Both Samsung and GloFo license their process from IBM, as will UMC. IBM is much better at delivering slide shows than a process on time. TSMC is showing slides too but they have a poor track record as well. If history is any predictor then neither will deliver a working 20nm process on time. Certainly Apple is as good a student of history as you or I. They can read the handwriting on the wall too.
    7 Mar, 01:43 PM Reply Like
  •  
    So, it is final, Apple is getting out of Samsung's life ?
    7 Mar, 03:02 PM Reply Like
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    what do I know

    No. Nothing is final until Apple says so but it's very unlikely they'll stay with Samsung.
    7 Mar, 03:08 PM Reply Like
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