Intel (INTC) Stock: Google and Amazon Talks Could Be a Game-Changer for Foundry

TLDR

• Intel is in talks with Google and Amazon to provide advanced chip packaging services through its Foundry arm.
• Intel’s EMIB and EMIB-T packaging tech is pitched as more power-efficient and cost-effective than TSMC’s approach.
• EMIB-T is set to roll out in fabs this year, with mass production already being prepared in Rio Rancho, New Mexico.
• Intel’s Foundry chief says a jump in capital expenditure will be the clearest sign that major customers have signed on.
• Potential customers are reportedly cautious, worried Intel may not deliver on expansion promises or that TSMC could cut their wafer allocations in response.

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Intel (INTC) stock was trading around $20 on Monday as the market digested a new report detailing the company’s push into advanced chip packaging.

Intel Corporation, INTC

Intel has been in ongoing talks with Google (GOOGL) and Amazon (AMZN) about using its advanced packaging services, according to a report from Wired citing multiple sources. Both companies make their own custom chips but outsource parts of the fabrication process.

Advanced chip packaging is the process of connecting multiple chips or chiplets together into a single, more powerful unit. It has become a key battleground in the AI era, with demand for faster, more efficient chips pushing the technology to the front of the semiconductor roadmap.

Intel’s packaging business operates within its Foundry division. The company has been signaling for months that this part of the business is growing quickly.

Intel’s approach — built around its EMIB and EMIB-T technologies — is described by a former Intel employee as a more “surgical” method compared to what TSMC offers. The pitch to customers is that it uses less power, saves space, and can reduce costs over time.

Intel said EMIB-T is expected to roll out in fabs this year.

The New Mexico Factor

Production preparations are already underway at Intel’s facility in Rio Rancho, New Mexico. The site employs around 2,700 people — about 200 fewer than last year, following workforce reductions under CEO Lip-Bu Tan.

Katie Prouty, the plant manager at Rio Rancho, said one of Intel’s key selling points is flexibility. Customers can use Intel for one step in the process and go elsewhere for others. “That’s not something Intel did before. We never took in other customers’ wafers,” Prouty said. “That’s been a huge mindset shift.”

That flexibility matters. A customer could buy wafers from one supplier, bring them to Intel for advanced packaging, and use a separate firm for other steps. It’s an open-door approach designed to lower the barrier for new customers to try Intel’s services.

Customers Are Watching, Not Committing Yet

Not everyone is ready to sign on the dotted line. A former Intel employee told Wired that potential customers are holding back for two main reasons.

First, some are waiting to see whether Intel can actually deliver on its fab expansion promises. Second, there are concerns that TSMC — which remains the dominant player in chip manufacturing — could quietly reduce wafer allocations to any customer that goes public about using Intel for packaging.

Naga Chandrasekaran, head of Intel Foundry, said the company is staying disciplined about customer confidentiality. “Successful foundries don’t say, ‘We have signed up these customers.’ We want the customers to talk about our product,” he said.

Chandrasekaran added that the clearest public signal that big customers have arrived will be a rise in Intel Foundry’s capital spending. “As we sign up these customers, we’ll have to increase our capital expenditures,” he said. “And then the street will see it.”

Amazon, Google, and Intel did not respond to requests for comment from Seeking Alpha.

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