Intel Stocks Plummet Following Apple’s In-House Chip Manufacturing Announcement

Intel just saw its biggest drop in stocks in two years following the reports that Apple was planning to start manufacturing its own chips for its computers. The iPhone maker has been getting its processors from Intel for its Mac devices, but come 2020, it hopes to change this by making the manufacturing process in-house.

The shares of the world’s leading manufacturer of computer chips dipped a worrisome nine percent on Wednesday, April 3rd following a report by Bloomberg that Apple was ditching it in favor of simply making its own chips in the future. The change reportedly won’t take effect until 2020, when it will start manufacturing in-house Mac processors, but the impact of the development could already be felt.

Details regarding this move by Apple was apparently provided to the publication by people familiar with the matter, but no formal announcements have been made by Apple itself. If Intel’s stocks could fall so steeply with just mere rumors, it’s easy to imagine what would happen if the iPhone maker decides to make things official.

This decision also marks a significant blow to the partnership that Intel and Apple formed, which was instrumental in helping to revive the Mac brand. On that note, the arrangement only constitutes five percent of Intel’s annual revenue, so the loss won’t really be that significant, all things considered.

Neither Intel nor Apple have decided to comment on this report except to say that they don’t comment on such claims, CNBC reports. However, the Cupertino firm has been dropping hints with regards to its impending decision to become its own manufacturer of parts as far back as last year, when Apple executives revealed that they were eyeing chip-making startups.

If this report does end up being true, it could pose another problem for Intel. An Apple with the capability to manufacturer processing chips for its own products can also start providing them to other companies. This would essentially make the former partners rivals.