Intel(INTC.US) is currently in talks with Amazon(AMZN.US) and Google(GOOGL.US) regarding collaboration involving advanced packaging services.

Zhitong Finance APP learned, citing reports from multiple sources, that Intel (INTC.US) is continuing discussions with at least two major customers, including Amazon (AMZN.US) and Google (GOOGL.US), with the cooperation involving its advanced packaging services.

The report says Intel’s advanced packaging business ambitions depend to a large extent on whether it can secure these external tech giants as customers. A former Intel employee familiar with the company’s packaging business told the publication that Intel’s EMIB and EMIB-T technologies were designed to deliver a “surgical-precision” chip packaging approach that is more precise than the solutions from TSMC (TSM.US). The report says this approach is expected to be more energy-efficient, save space, and ideally help customers lower costs in the long term. According to the report, Intel said EMIB-T will be put into use this year at wafer fabrication facilities.

Artificial intelligence has been a key catalyst driving these changes. Naga Chandrasekaran, head of Intel’s foundry business, said: “Because of the development of artificial intelligence, advanced packaging has truly moved to the forefront. Even more than the chips themselves, in the next decade, this kind of chip packaging will change the way this artificial intelligence revolution is made possible.”

Intel has already begun preparing its Rio Rancho factory in New Mexico for EMIB-T mass production. The report says the facility currently has about 2,700 Intel employees, which is about 200 fewer than last year. The report also notes that after the appointment of Chen Liwu as CEO, the company has cut its employee count.

Rio Rancho factory director Katie Prouty said a major selling point of Intel’s advanced packaging is that customers can choose to use Intel services at any stage of the process, or “enter and exit through any on-ramp and off-ramp on the highway.” For example, a customer can first purchase wafers from a company, then enter an Intel wafer fabrication facility at the next step; or it can first partner with a third-party semiconductor packaging and testing company to complete traditional packaging, and then use Intel for advanced packaging. She said: “This is not something Intel has done in the past. We have never accepted other customers’ wafers before. This is a huge shift in how we think.”

A former Intel employee who asked not to be named said Intel’s target packaging customers may be cautious about announcing the cooperation for two reasons: either they are waiting to see whether the company can deliver on its wafer-fab expansion commitments, or they worry that once they announce using Intel packaging services, TSMC may reduce the wafer supply it allocates to them. The former employee said that what customers are taking on is not the technology itself, but broader market dynamics.

However, Naga Chandrasekaran is more cautious about this. He said: “I think we need to be very disciplined in sticking to one principle—we don’t talk about customers. Successful foundries don’t say ‘we’ve already signed these customers.’ We want customers to talk about our products.” He noted that a clear sign of an arriving customer would be a significant increase in Intel foundry business spending. He said, “As we sign these customers, we will have to increase capital expenditures,” and added that “the market will see it then.”