Apple, Intel Reach Preliminary Chipmaking Deal, Boosts INTC Shares

Intel's (INTC) shares surged nearly 16% on Friday after reports emerged of a preliminary agreement between Intel and Apple (AAPL) to manufacture chips for some of Apple's devices.

The deal, which comes after over a year of talks, would be a major boost to Intel's Foundry unit, which has been underperforming. In the first quarter, Intel reported an operating loss of $2.4 billion in its Foundry unit.

This is significant as Apple, like many other companies, outsources chip manufacturing to Taiwan Semiconductor Manufacturing Co. (TSMC). However, with this deal, Apple would become a major customer for Intel's Foundry unit.