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Fab 9 Revival
Intel has restarted its dormant Fab 9 in Rio Rancho after 17 years.
“In January 2024, the dormant fab was booted up again with a $500 million CHIPS Act grant”
The site received $500 million from the US CHIPS Act as part of a multi-billion dollar investment.
Packaging involves combining multiple chiplets onto a single custom chip.
CFO Dave Zinsner said the company expects to see revenue from packaging come in before wafer revenue.
Hyperscaler Partnerships
Intel is negotiating advanced packaging deals with Google and Amazon to provide services for their custom AI processors.
These deals could represent a major influx of external revenue for Intel Foundry.
Packaging technology centers on EMIB and Foveros.
EMIB-T adds through-silicon vias and is set to roll out this year.
Challenging TSMC
Intel's advanced packaging push emerges as hyperscalers face capacity constraints at TSMC.
“Intel pushes large-area AI packaging to close foundry gap”
Intel is scaling capacity across the US, Malaysia, and China.
Packaging operates as the most profitable section of Foundry with approximately 40% gross margin.
Market and Financial Outlook
Packaging revenue projections have grown from hundreds of millions to well over $1 billion for 2026.
Margins compare favorably with Intel’s core business.
Challenges include scaling capacity and managing environmental factors.