Intel Corporation is in advanced talks with Google and Amazon for its advanced packaging services on custom AI chips. This development could bring in billions of dollars in new revenue annually, surpassing the company’s initial guidance of “hundreds of millions” per year.
Advanced packaging has become a critical bottleneck in the AI race, as hyperscalers need denser interconnects and higher-bandwidth memory assemblies to overcome single-wafer fabrication limits. Intel’s packaging tools, such as EMIB and Foveros, deliver 40% gross margins and offer a domestic alternative for U.S.-based customers.
The company’s CFO, Dave Zinsner, signaled that potential deals could arrive before meaningful wafer revenue kicks in. If confirmed, these deals would validate Intel’s foundry pivot and put the division on a firmer path to breakeven by 2027.
This news has sparked excitement among shareholders, as it could re-rate the stock significantly higher if packaging revenue hits billions of dollars per year. With capacity ramps underway and expanded packaging planned in Malaysia later this year, investors should watch the next few quarters for contract announcements.
Despite risks, including competition from Taiwan Semiconductor Manufacturing, smart investors should keep an eye on Intel’s progress. The company’s long-term AI infrastructure story is promising, and these potential deals make it a compelling buy for those who believe in its future growth prospects.
Source: https://finance.yahoo.com/markets/stocks/articles/intel-verge-delivering-first-billion-161943809.html