Demand for Nvidia's AI chips is so strong that the GPU giant has reportedly dethroned Apple as TSMC's largest customer. That news comes straight from Nvidia CEO Jensen .
Apple has long enjoyed special treatment from TSMC. The company gets to jump to the head of the line for new manufacturing processes, and it also reportedly doesn't pay TSMC for defective dies, which is an unusual arrangement. However, as Apple's business no longer matters quite as much to TSMC amid exploding demand for AI chips, rumors are circulating that Apple is losing some of those privileges. Going forward, it appears Apple will need to compete for manufacturing capacity alongside the rest of TSMC's customers and face hefty price increases.
Who's the big winner from Apple's misfortune? Surprisingly, it's Intel (INTC +11.72%).
Image source: Intel.
Apple rumors are looking more likely
Multiple analysts have upgraded Intel stock recently, and one of the reasons is a rumor that Apple is close to choosing Intel to manufacture some of its chips. According to the rumors, Apple is considering using a version of the Intel 18A process for its lower-end M-series chips. That could translate into 15 million to 20 million chips annually, according to analyst Ming-Chi Kuo.
Additionally, some analysts have noted that Apple is also rumored to be exploring the Intel 14A process for future iPhone chips. Intel 14A is expected to launch in 2027, and Intel CEO Lip-Bu Tan recently expressed optimism about the process.
These rumors are more likely to be true if Apple is genuinely losing its privileged status at TSMC. As Apple plans for products set to launch in 2027, 2028, and 2029, it needs to ensure it has enough chip supply to meet expected demand. With TSMC having no reason to treat Apple differently anymore as AI chips become a larger part of its business, and with Apple likely subject to major price increases for new processes as demand for advanced manufacturing capacity outstrips supply, Apple has every reason to seek out alternative manufacturing sources.
NASDAQ: INTC
Key Data Points
Intel's foundry fortunes just changed
Intel has largely been an AI loser so far, but the company is now in a prime position to secure chip orders from companies unable to secure capacity at TSMC. In the next stage of the AI boom, Intel could be one of the biggest winners as Apple and other chip designers fight for manufacturing capacity.
Intel stock surged in 2025 and is surging again in 2026. If the company secures Apple as a foundry customer, any doubts about Intel's foundry strategy go out the window. With Apple now reportedly being outspent by Nvidia at TSMC, the stage has been set for Intel's foundry business to boom.
