Intel's AI Packaging Powers Multi-Billion Dollar Deals

Intel's advanced chip packaging operations are now central to its strategy for capitalizing on the AI boom, with the company heavily investing in its Rio Rancho, New Mexico facilities. Fab 9, dormant since 2007, has been reactivated and, along with Fab 11X, is now critical infrastructure for this burgeoning business. This packaging segment, part of Intel's Foundry division, combines multiple chiplets into custom chips, a capability in high demand for AI applications.

Intel anticipates substantial revenue from its packaging services, with projections revised to well over $1 billion annually. Company executives have indicated that packaging revenue may even precede significant wafer revenue. Furthermore, Intel is reportedly in discussions with major tech giants like Google and Amazon for its advanced packaging solutions, potentially leading to deals worth billions of dollars per year.

This resurgence in advanced chip packaging is a key element of Intel's comeback strategy, supported in part by US government funding through the CHIPS Act. The company's success in securing external customers for its Foundry business is closely watched by analysts and investors, as it aims to achieve 40 percent gross margins for this segment.