Apple may start using its own chips in Mac computers as soon as 2020.
Apple and Intel declined to comment on the report.
Intel's shares tumbled 7.6 percent to $48.12 after the news.
Losing Apple as a customer would deal a big blow to Intel. While Macs make up only a small percentage of the total PC market -- 8.2 percent in the fourth quarter, according to IDC -- Apple remains one of the biggest and most powerful companies in technology. Macs tend to command higher prices than Windows-based PCs, and while many PC companies have seen their market share slide, Apple's has been rising.
Intel, which was late to mobile, has seen its core PC market shrink. It's managed to win new business with Apple, supplying 4G chips for some iPhones. But as Intel expands in mobile, its phone rivals have been encroaching on laptops.and PC makers like Asus to create that are similar to mobile devices.
Apple, too, has been expanding into the components market. It now makes its own application processors that act as the brains of its mobile devices, ato quickly link its AirPods to its iPhones, and security chips that protect personal data and biometrics from hacking attempts. By building its own chips, Apple is able to better control the features it releases, as well as its timeline for introducing new devices.
The company has used Intel chips in its computers for over a decade, when it moved away from its previous partner, IBM. That decision changed the PC industry and helped Intel become the world's dominant computer chip maker.
Apple's new effort is code-named Kalamata, according to Bloomberg. It's part of Apple's push to make its devices work together better, the publication said.
First published April 2, 11:15 a.m. PT.
Update, 11:40 a.m. PT: Added more background information and Intel declining to comment.
Does the Mac still matter? Apple execs explain why the MacBook Pro was over four years in the making, and why we should care.
Tech Culture: From film and television to social media and games, here's your place for the lighter side of tech.
reading•Apple Macs may use own chips, drop Intel's, as early as 2020
Jun 19•Google Home, Chromecast exploit, Roku to launch subscription marketplace
Jun 19•Couple uses Facebook to raise over $3.45M to reunite immigrant families
Jun 19•Trump reportedly told Tim Cook iPhones would be spared tariffs
Jun 19•Apple fined $6.8M in Australia after Error 53 controversy