This article first appeared on GuruFocus.
Intel (NASDAQ:INTC) has held ongoing discussions with Amazon (NASDAQ:AMZN) and Google (NASDAQ:GOOG) about using the chipmaker’s advanced packaging services.
The talks signal Intel’s effort to secure outside customers for its packaging technology, a key part of its foundry business. Intel’s EMIB and EMIB-T packaging methods are designed to be more power efficient and save space compared with Taiwan Semiconductor Manufacturing’s (NYSE:TSM) approach, the report said, citing a former Intel employee.
Artificial intelligence has driven demand for advanced chip packaging. Naga Chandrasekaran, head of Intel Foundry, said packaging may transform the AI revolution over the next decade. Intel has prepared for mass production of EMIB-T at its Rio Rancho, New Mexico facility, which employs about 2,700 people.
Some potential customers may hesitate to publicly commit to Intel. A former employee said companies may be waiting to see if Intel delivers on its fab expansion plans, or they may worry about wafer allocation from TSM. Chandrasekaran said Intel does not discuss its customers. He added that a jump in Intel Foundry’s capital spending would signal that new customers have signed on.
