Key Takeaways:
A potential Apple-Intel foundry deal could compel Intel to spend up to €4.6 billion on new equipment from ASML, according to Bank of America.
The inclusion of iPhone chip production is the critical factor that could increase BE Semiconductor machine orders by more than tenfold, from 15 to 182 units.
Equipment Order Scenarios (BofA Estimates):
A potential $10 billion chip manufacturing partnership between Apple and Intel could set off a spending wave of up to €4.6 billion for new equipment, with Dutch supplier ASML positioned as the biggest winner, according to a new analysis from Bank of America.
"The scale of Intel's equipment procurement will be largely determined by whether the cooperation covers the production of iPhone chips," Bank of America analysts said in a report. The bank estimates the deal could eventually generate $10 billion in annual foundry revenue for Intel by 2030.
The analysis outlines two distinct scenarios. A baseline case, which excludes iPhone chips, would likely result in around €1.8 billion in orders for ASML's highly sought-after lithography machines. Should the partnership expand to include the iPhone, that figure more than doubles to €4.6 billion, which would require Intel to purchase 15 additional extreme ultraviolet (EUV) lithography systems. The impact on hybrid bonding equipment maker BE Semiconductor is even more pronounced, with potential orders jumping from just 15 machines to 182 if iPhone production is included.
This potential deal marks a major validation for Intel's foundry strategy and a significant supply chain diversification for Apple, which currently relies heavily on Taiwan's TSMC. For the equipment makers, it represents a substantial new revenue stream, underscoring the massive capital expenditures required to operate at the leading edge of semiconductor manufacturing.
The dramatic difference in equipment orders hinges entirely on the scope of the Apple-Intel agreement. The talks, which The Wall Street Journal reported have been ongoing for over a year, have not yet publicly disclosed which chips Intel would manufacture for Apple.
BE Semiconductor's order book illustrates the iPhone's importance. An order for 182 hybrid bonding machines would far exceed the 80 total units Intel was previously expected to purchase between 2024 and 2030. This surge is directly tied to the advanced packaging requirements of smartphone processors, a market segment where Intel is actively trying to win business as demand from AI infrastructure strains existing capacity at competitors like TSMC.
ASML's central position as a beneficiary is due to its absolute monopoly on EUV lithography machines, which are indispensable for producing the most advanced chips. To handle any advanced chip orders from Apple, Intel would have no choice but to expand its EUV capacity, making ASML an unavoidable partner in the process.
While Bank of America raised its price target on Intel to $96 following the news, it maintained an Underperform rating, citing "execution risks and future spending requirements." Intel shares have rallied nearly 14 percent since the initial report, reflecting investor optimism about a turnaround in its foundry division.
This article is for informational purposes only and does not constitute investment advice.
