Intel beat TSMC to win contracts to package AI chips for Google and Amazon.

Intel's advanced chip packaging service is attracting growing interest from customers, with total commitments reaching billions of dollars this year alone.

Advanced chip packaging has become a vital element in the semiconductor industry, just as important as the chip itself.

As the rate of transistor miniaturization according to Moore's Law slows down, manufacturers like NVIDIA have turned to this solution to increase performance without relying entirely on process miniaturization.

Currently, TSMC has a near-monopoly on meeting the demand for advanced packaging, with products like CoWoS-L widely used in AI chip architectures.

The problem is that the supply from this Taiwanese chip manufacturer is severely restricted, even scarcer than regular chips.

This opens up opportunities for Intel Foundry, currently the only company with a portfolio of advanced packaging that rivals TSMC. According to WIRED, Google and Amazon are in negotiations with Intel to use its EMIB packaging service.

Both companies design their own chips but outsource part of the manufacturing process. Specifically, Google's TPU chips and Amazon's Trainium chips will likely integrate Intel's EMIB-T technology in future generations.

Chief Financial Officer David Zinsner previously stated that customers were willing to sign commitments and accept upfront payments totaling billions of dollars to reserve production capacity, demonstrating confidence in Intel's EMIB technology and other packaging solutions.

One weakness of TSMC is that the majority of its advanced packaging manufacturing capacity is concentrated in Taiwan, posing both geopolitical risks and limiting its ability to serve new customers.

CoWoS production lines are now almost entirely occupied by long-standing customers. This leaves Intel as the only viable option left for chip design companies and large technology corporations seeking an advanced packaging partner.

According to Intel's announced roadmap, details of its customer commitment are expected to be revealed in the second half of 2026. More specific information may emerge at the next earnings announcement, scheduled for April 23rd.