Intel's remarkable turnaround story just gained its most important chapter. Apple—the company that famously abandoned Intel processors in 2020—has become a customer of Intel's foundry business, using the company's cutting-edge 18A manufacturing process for low-end processors in MacBooks and iPads.

The Deal That Nobody Saw Coming

KeyBanc analyst John Vinh dropped the bombshell in a research note this week, revealing that Apple has already landed as an Intel foundry customer on the 18A process. But the relationship may be just beginning—Vinh believes Intel and Apple are currently in discussions to use Intel's even more advanced 14A technology to support low-end mobile processors for iPhones.

The news sent Intel shares up 7.33% on Tuesday to $47.29, extending a remarkable 27% gain since the start of 2026. That follows an 84% surge in 2025, as investors increasingly bet on the company's foundry transformation.

"Intel's 18A process yields are over 60% and good enough to ramp Panther Lake. This positions Intel as a potential No. 2 foundry supplier in the industry ahead of Samsung but behind TSMC."

— John Vinh, KeyBanc Capital Markets

Why This Matters

Apple's decision to use Intel's foundry services represents a strategic validation that money simply cannot buy. Apple has the resources to manufacture anywhere in the world and the engineering talent to evaluate every option. If Apple is trusting Intel's 18A process for production silicon, it sends a powerful signal to other potential foundry customers.

The implications extend beyond Apple's relatively small initial orders:

  • Technology proof point: Apple's involvement validates Intel's 18A yields and quality claims
  • Customer pipeline: Other hyperscalers including Amazon, Alphabet, and Meta have expressed interest in Intel's advanced packaging technologies
  • Geopolitical diversification: U.S. companies gain an American alternative to TSMC's Taiwan-based manufacturing
  • Revenue acceleration: Foundry wins could accelerate Intel's path to profitability in its manufacturing services division

The Server CPU Windfall

The Apple news comes alongside equally significant developments in Intel's traditional server business. KeyBanc reports that Intel is "largely sold out" of server CPUs for 2026, with demand strong enough that the company may pursue a 10-15% average selling price increase.

This marks a dramatic reversal from the narrative of just 18 months ago, when Intel was written off as a declining legacy player losing market share to AMD and Nvidia. The server chip shortage reflects the insatiable demand from AI infrastructure buildouts—even as attention focuses on GPU accelerators, the underlying server platforms still require Intel and AMD processors.

The 18A Technology Breakthrough

Intel's 18A process represents the company's most advanced manufacturing node, incorporating several breakthrough technologies:

  • RibbonFET: Intel's version of gate-all-around transistor technology
  • PowerVia: Backside power delivery that improves performance and density
  • Advanced packaging: 3D stacking and interconnect technologies enabling chiplet designs

The greater than 60% yield rate cited by KeyBanc suggests Intel has overcome the manufacturing challenges that plagued earlier node transitions. While still trailing TSMC's industry-leading yields, Intel's position ahead of Samsung in the foundry hierarchy represents a meaningful competitive win.

The Path to $60

KeyBanc raised its Intel price target to $60, implying 36% upside from current levels. The bull case rests on several pillars:

  • Continued foundry customer wins beyond Apple
  • Successful launch of Panther Lake laptop processors
  • Server CPU pricing power and volume growth
  • Potential for additional AI-related product announcements

Risks and Challenges

Intel bulls should acknowledge several risks that could derail the turnaround narrative:

Execution risk: Intel must prove its 18A yields hold steady in volume production, not just in limited customer tests. The company has a history of manufacturing stumbles that have cost it dearly.

TSMC dominance: Taiwan Semiconductor remains the clear industry leader with superior yields, capacity, and customer relationships. Intel is competing for second place, not first.

Capital requirements: Building leading-edge foundry capacity requires enormous capital investment. Intel's balance sheet remains strained from years of transformation spending.

What Comes Next

Investors will be watching several upcoming catalysts:

  • TSMC earnings (January 15): Commentary on customer demand and competitive positioning
  • Intel Q4 earnings (January 23): Updated foundry guidance and customer pipeline details
  • Apple earnings (February): Any discussion of diversifying chip manufacturing sources

The Bottom Line

Intel's partnership with Apple on 18A represents a watershed moment in the company's foundry ambitions. While Intel remains far behind TSMC in overall capability and customer base, landing Apple as a customer provides credibility that could attract additional hyperscaler business.

For investors, Intel's turnaround is no longer just a hope—it's beginning to materialize in real customer wins and sold-out product lines. The question is no longer whether Intel can compete, but how much market share it can capture as the only American company capable of leading-edge chip manufacturing.