Intel Corp. (INTC) shares soared more than 10% Friday after analyst Ming-Chi Kuo from TF International Securities dropped a report suggesting Apple is getting surprisingly serious about tapping Intel as a chip manufacturer.

This would be a bigger deal than it sounds. Apple ditched Intel's processors years ago to design its own silicon, and those chips have been made exclusively by Taiwan Semiconductor Manufacturing Company (TSM). Now it looks like Apple might bring Intel back into the fold—not to design chips, but to actually manufacture them.

According to Kuo, the momentum behind this potential partnership is "much stronger than previously believed." Apple has already signed a non-disclosure agreement with Intel and received something called the 18AP advanced-node PDK 0.9.1GA. That's industry jargon for the design toolkit that lets Apple's engineers simulate how their chips would perform if made using Intel's manufacturing process. The important part? Key validation work is moving forward on schedule.

The timeline looks like this: Apple expects Intel to deliver an updated toolkit (PDK 1.0/1.1) in Q1 2026, which Kuo calls a critical milestone. If everything goes smoothly, Intel could start shipping Apple's lowest-end M-series processor—the kind currently used in the MacBook Air and iPad Pro—sometime between mid-2027 and late 2027.

Kuo projects annual shipments would hit 15-20 million units in 2026 and 2027. That's slightly below today's combined volumes, partly because Apple is expected to introduce a cheaper MacBook variant powered by an iPhone-class processor, which would eat into some of that demand.

Now, before Taiwan Semiconductor investors panic: Kuo emphasizes the order size is modest and won't meaningfully threaten TSMC's dominant position. Apple will continue relying heavily on Taiwan Semiconductor for the foreseeable future. But the strategic significance shouldn't be dismissed.

For Apple, this is about supply chain resilience. Having a second advanced manufacturing partner reduces risk, especially given ongoing geopolitical tensions around Taiwan. The partnership also aligns neatly with U.S. industrial policy goals, including domestic manufacturing initiatives that gained traction during the Trump administration.

For Intel, landing Apple as a foundry customer would be transformational. It's the kind of validation that could restore confidence in Intel Foundry Services after years of struggling to compete with Taiwan Semiconductor's technological lead. Kuo suggests this win could signal Intel's worst period is ending and might open doors to future Apple orders on even more advanced nodes—plus attract other top-tier customers who've been skeptical.

While Intel still lags behind Taiwan Semiconductor technologically, proving it can manufacture chips that meet Apple's exacting standards would be a meaningful turning point.

Price Action: Intel (INTC) stock was up 10.19% at $40.56 at publication Friday.