Intel Shares Rise as Apple Explores Expanding Chip Supply Chain

Apple Inc. (NASDAQ:AAPL) has reportedly begun early-stage discussions with Intel Corporation (NASDAQ:INTC) and Samsung Electronics Co. Ltd. (USOTC:SSHNZ) over the potential production of core processors for its devices, according to a Bloomberg report citing sources familiar with the matter.

The reported talks come as the iPhone maker looks to broaden its supplier base beyond long-standing partner Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM).

Intel shares climbed 3.3% in U.S. premarket trading following the news, while Samsung Electronics ended the day at a record high of KRW232,500, up 5.4%.

The conversations are still in their initial phase and reflect Apple’s intention to reduce dependence on a single manufacturer for its custom-designed chips, which power products such as iPhones, iPads and Macs.

Bloomberg reported that Apple has approached Intel regarding the possible use of its foundry capabilities. In addition, Apple executives have visited Samsung’s new semiconductor fabrication facility currently under construction in Texas.

Any move to diversify suppliers would represent a notable shift in Apple’s supply chain approach, although no definitive decisions have been reached at this stage, the report noted.