WSJ Tech News Briefing
WSJ Tech News Briefing

TNB Tech Minute: Apple and Intel Reach Preliminary Chip-Making Deal

3 min
•May 8, 202622 days ago
Listen to Episode
Summary

Apple and Intel have reached a preliminary chip-manufacturing agreement, diversifying Apple's supply chain beyond TSMC with Trump administration support. The episode also covers Nintendo's strong earnings but softer outlook, and Akamai's stock surge following a major cloud infrastructure deal.

Insights
  • Apple's diversification of chip suppliers reduces dependency risk on TSMC amid geopolitical tensions and supply chain vulnerabilities
  • Government intervention through equity stakes and grants is reshaping semiconductor manufacturing decisions and corporate strategy
  • Cloud infrastructure providers are consolidating partnerships with AI frontier model companies as demand accelerates
  • Gaming hardware sales cycles are maturing, forcing companies to expand into adjacent entertainment verticals for growth
  • Market sentiment around AI infrastructure providers remains volatile, with competitive announcements triggering significant stock movements
Trends
Semiconductor supply chain diversification as strategic priority for major tech companiesGovernment equity stakes and subsidies influencing private sector manufacturing decisionsAI infrastructure partnerships becoming critical differentiators for cloud service providersGaming companies pivoting to entertainment ecosystem expansion beyond hardware salesInvestor sensitivity to competitive threats in AI infrastructure and frontier model marketsFederal policy driving reshoring of advanced manufacturing capabilities
Companies
Apple
Reached preliminary agreement with Intel to manufacture chips, diversifying beyond primary supplier TSMC
Intel
Secured preliminary deal to manufacture chips for Apple devices following over a year of negotiations
TSMC
Apple's primary chip supplier; diversification move reduces dependency on this single supplier
Nintendo
Reported 52% net profit increase but projected 27% profit decline and 11% revenue drop for current fiscal year
Akamai
Cloud infrastructure and cybersecurity company; stock surged 26% following $1.8 billion deal with frontier AI model p...
Anthropic
Frontier AI model provider whose new offering previously caused investor concerns about Akamai service demand
Deloitte
CEO Jason Garzadas discussed transformational potential of Agentic AI for business operations
People
Jason Garzadas
Discussed transformational potential of Agentic AI and how agents are game changers for businesses
Julie Chang
Hosted the TNB Tech Minute briefing segment
Quotes
"The potential of Agentic is to rethink how work gets done overall. It challenges all sorts of traditional orthodoxies around how organizations execute the work at hand."
Jason Garzadas, CEO of Deloitte U.S.
"Apple and Intel have reached a preliminary agreement for Intel to manufacture some chips for Apple devices."
Julie Chang
"The move helps Apple diversify beyond its primary supplier, TSMC."
Julie Chang
Full Transcript
I think the potential of Agentic is to rethink how work gets done overall. It challenges all sorts of traditional orthodoxies around how organizations execute the work at hand. That's Jason Garzadas, CEO of Deloitte U.S., talking about the transformational potential of Agentic AI. Join him later to learn why agents are a game changer for businesses across industries. Here's your afternoon TNB Tech Minute for Friday, May 8th. I'm Julie Chang for The Wall Street Journal. We exclusively report that Apple and Intel have reached a preliminary agreement for Intel to manufacture some chips for Apple devices. People familiar with the matter say the deal follows more than a year of intensive talks, which were first reported by Bloomberg. While it remains unclear which specific products the chips are for, the move helps Apple diversify beyond its primary supplier, TSMC. Representatives for both companies declined to comment. The Trump administration played a key role in making the deal happen. The administration last summer struck a deal to convert nearly $9 billion in federal grants into Intel stock, giving the U.S. government a 10% stake in the chipmaker. Nintendo projected a softer year ahead, despite reporting strong annual earnings. For the 12 months ended March, the Japanese video game maker's net profit rose 52% to about $2.7 billion, beating analyst estimates. For the current fiscal year, Nintendo projected revenue would drop 11 and net profit would fall 27 The company said it expects to sell 16 million Switch 2 consoles That down from almost 20 million units sold the previous fiscal year. The company has been trying to diversify its revenue streams beyond video games. It's expanded into movies, theme parks, and other forms of entertainment by leveraging its popular characters and game titles. And Akamai's stock closed up over 26 percent, leading the S&P 500. Akamai is a cloud infrastructure and cybersecurity company. The company said it had inked a $1.8 billion deal with a quote leading frontier model provider to provide cloud infrastructure services. Revenue in Akamai's cloud infrastructure business jumped 40 percent to $95 million in the first quarter of the year, per the company yesterday. Shares of the company are recovering from a sharp sell-off in April on investor concerns that a new offering from Anthropik could hurt demand for Akamai services. And that's your TMB Tech Minutes. Check back Monday for another Quick Tech Update. How are the U.S. businesses of Philip Morris International invested in America? We're invested in advancing science, giving adults who smoke better options. We're invested in American manufacturing, helping local economies thrive. We're invested in community, supporting military veterans and their families, disaster relief, and economic empowerment. Because we're proud to be invested in America. See how at USPMI.com.