Intel is revamping its chip packaging business with a massive investment of billions of dollars. The company’s advanced packaging technology, which combines multiple chiplets into a single custom chip, is being touted as a key differentiator from competitors like Taiwan Semiconductor Manufacturing Corporation (TSMC). Intel expects to see significant revenue growth from this segment, with chief financial officer Dave Zinsner projecting $1 billion in revenue over the next 12-18 months.
The company’s efforts around advanced packaging are being driven by the growing demand for computing power and AI. Intel is partnering with major tech giants like Google and Amazon, which outsource parts of their chip fabrication process to external companies. The company’s CEO, Lip-Bu Tan, claims that its packaging is a “very big differentiator” from competitors.
However, Intel still faces significant challenges in securing outside customers for its advanced packaging services. The company has been split into two segments: the long-standing “product” side and the aspirational Foundry side, which focuses on making advanced semiconductors. Analysts say that Intel’s ability to secure these deals will be crucial to the success of its Foundry business.
Intel is also expanding its manufacturing capabilities in Malaysia and New Mexico, with plans to increase production of custom chips. The company’s packaging technology, including EMIB-T, promises to improve power efficiency and signal integrity between components on chips. Analysts say that AI has been a major catalyst for these changes, transforming how chip packaging will come to fruition over the next decade.
Despite its ambitions, Intel faces concerns from local advocacy groups about water usage and fumes from the plant. The company claims to recycle water at the Rio Rancho site, but critics remain skeptical. As Intel looks to secure customers for its advanced packaging business, analysts say that it needs to demonstrate tangible progress in expanding its fab capacity and meeting customer demand.
Source: https://www.wired.com/story/why-chip-packaging-could-decide-the-next-phase-of-the-ai-boom