Intel is reportedly engaged in discussions with Google and Amazon to deliver advanced chip packaging services tailored for their custom AI processors, according to a report by WIRED published today. Sources claim that Intel has ongoing negotiations with at least these two tech giants regarding its advanced packaging services.
If these deals are finalized, they would mark a significant boost in external revenue for Intel Foundry. Chief Financial Officer Dave Zinsner mentioned at the recent Morgan Stanley TMT conference that Intel is “close to closing some deals that are in the billions of dollars per year” related to packaging services. Both Google and Amazon, along with Intel, declined to comment specifically on these customer relationships.
Intel’s advanced packaging portfolio features technologies such as EMIB (Embedded Multi-die Interconnect Bridge) and Foveros, which facilitates 3D die stacking. The anticipated next-generation EMIB-T will incorporate through-silicon vias for enhanced power delivery and signal integrity, with production set to commence this year. EMIB-T is designed to support packages as large as 120×180 mm, accommodating more than 38 bridges and over 12 reticle-sized dies.
The company is scaling its packaging capacity across multiple locations, including its Fab 9 facility in Rio Rancho, New Mexico, which has received $500 million from the CHIPS Act and has been operational since January 2024. In Malaysia, the Penang advanced packaging complex is nearly complete and is expected to begin assembly and testing operations later this year, as confirmed by Malaysian Prime Minister Anwar Ibrahim after a briefing with Intel CEO Lip-Bu Tan in March. Intel has also begun outsourcing EMIB production to Amkor’s facility in South Korea, with plans for additional sites in Portugal and Arizona.
Naga Chandrasekaran, head of Intel Foundry, stated that packaging has become increasingly critical, even more so than the silicon itself, in the realm of AI computing. “Chip packaging is going to transform how this AI revolution comes to fruition over the next decade,” he said. Zinsner also noted that he has revised packaging revenue projections over the past 12 to 18 months from hundreds of millions to “well north of $1 billion,” suggesting that packaging could achieve similar gross margins to Intel’s core product business, which stands at 40%.
These forecasts, however, contrast sharply with the division’s current financial performance. Intel Foundry reported $4.5 billion in revenue for Q4 2025 but incurred a $2.5 billion operating loss. For the full year, external foundry revenue amounted to just $307 million, primarily derived from U.S. government contracts and residual work with Altera. The Foundry division ended 2025 with a $10.3 billion loss on $17.8 billion in revenue, largely attributed to the costs associated with ramping Intel’s new 18A process technology.
As Intel continues to innovate in the field of chip packaging and expand its partnerships with major tech companies, the implications of these developments could redefine the competitive landscape in AI computing. The integration of advanced packaging technologies may play a pivotal role in meeting the escalating demands for AI processing power, shaping the industry over the next decade.
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