Intel is going all-in on advanced chip packaging

Nestled just sixteen miles north of Albuquerque, in Rio Rancho, New Mexico, lies an Intel chip manufacturing facility that spans over 200 acres. Originally established in the 1980s, this site has seen its share of ups and downs. In 2007, as Intel faced significant challenges, operations at one of its key fabrication plants, known as Fab 9, were suspended. During this downtime, local wildlife, including raccoons and a badger, made the abandoned space their home. However, in January 2024, Fab 9 was revitalized, marking a significant turnaround for Intel. The company invested billions into the facility, with $500 million coming from the U.S. CHIPS Act to bolster its operations. Now, both Fab 9 and its neighboring Fab 11X are pivotal to Intel’s burgeoning focus on advanced chip packaging—a sector that is rapidly gaining traction. Advanced packaging involves the integration of multiple chiplets, or smaller components, into a single, customized chip. Over the past six months, Intel has indicated that this segment of its Foundry chip-making division is experiencing substantial growth. This strategic pivot puts Intel in direct competition with the Taiwan Semiconductor Manufacturing Corporation, which currently leads in production scale. As artificial intelligence continues to surge in demand for diverse computing power, many tech giants are exploring custom chip manufacturing. Intel is positioning itself to capture a significant share of this AI-driven market. During a recent quarterly earnings call, Intel CEO Lip-Bu Tan highlighted the company’s advanced packaging capabilities as a key differentiator in the competitive landscape. Meanwhile, Chief Financial Officer Dave Zinsner shared optimistic projections, stating that revenue from packaging is expected to materialize even before substantial wafer revenue kicks in, with forecasts now exceeding $1 billion—a significant increase from previous estimates in the hundreds of millions.