Apple is planning to use its own chips in Mac computers beginning as early as 2020, replacing processors from Intel, Bloomberg reported on Monday, citing people familiar with the matter.
Intel shares were down 7.6 percent at $48.10, while the tech-heavy Nasdaq was down 3.6 percent.
Apple has been designing its own chips for the iPhones and iPads (ARM architecture) but seems that it plans to further lessen its dependence on chip makers, starting with chips for its Macs. The Mac plays a small part in Apple's overall financial picture, with sales of 19.2 million units last year and accounting for 11 percent of Apple's $229.2 billion in revenue for fiscal 2017.
Apple's in-house chip design initiative for Macs, code-named Kalamata is still in early developmental stages but is part of a bigger strategy to make Apple's family of devices work more similarly and seamlessly together, according to the report.
Apple could still theoretically abandon or delay the switch. The company declined to comment. Intel said, "We don't comment on speculation about our customers."
As part of the larger initiative to make Macs work more like iPhones, Apple is working on a new software platform, internally dubbed Marzipan, for release as early as this year that would allow users to run iPhone and iPad apps on Macs, Bloomberg News reported last year.
The company has also previously released Macs with ARM-based co-processors, which run an iOS-like operating system, for specific functions like security. The latest MacBook Pro and iMac Pro include the co-processors. Apple plans to add that chip to a new version of its Mac Pro, to be released by next year, and new Mac laptops this year.
Qualcomm Inc., the biggest mobile phone chip provider, is working with PC makers to introduce new thin and light laptops based on its chips in another attempt to steal share from Intel. Microsoft is supporting that effort by providing a version of its Windows operating system for ARM technology-based chips.
Despite the significant decline in PC sales, Intel still depends on PC chip sales for slightly more than half its revenue, though the chipmaker is aiming to make more of its money from growing markets like data centers.