Intel Corporation (INTC.US) is currently in talks with Amazon.com, Inc. (AMZN.US) and Alphabet Inc. Class C (GOOGL.US) regarding cooperation involving advanced packaging services.

According to reports quoted by the media from multiple sources, Intel Corporation (INTC.US) is in ongoing discussions with at least two major customers, including Amazon.com, Inc. (AMZN.US) and Alphabet Inc. Class C (GOOGL.US), regarding their advanced packaging services. The report states that the ambitions of Intel Corporation's advanced packaging business largely depend on whether they can secure these external customers such as tech giants. A former Intel Corporation employee familiar with the company's packaging business told the media that Intel Corporation's EMIB and EMIB-T technologies are designed to provide a more "surgical precision" chip packaging method than Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's (TSM.US) approach. The method is expected to be more energy-efficient, space-saving, and ideally help customers reduce costs in the long term. According to the report, Intel Corporation has stated that EMIB-T will be put into use in wafer factories this year. Artificial intelligence has been a key catalyst in driving these changes. Naga Chandrasekaran, head of Intel Corporation's foundry business, said, "With the development of artificial intelligence, advanced packaging has truly come to the forefront. Even more important than the chip itself, this type of chip packaging will change the way this artificial intelligence revolution is realized in the next decade." Intel Corporation has already begun preparations for mass production of EMIB-T at its Rio Rancho plant in New Mexico. The facility currently has about 2,700 Intel Corporation employees, a reduction of about 200 from last year. The report also notes that the company has reduced its workforce since the appointment of Pat Gelsinger as CEO. Katie Prouty, the plant manager at Rio Rancho, stated that one major selling point of Intel Corporation's advanced packaging is that customers can choose to use Intel Corporation services at any point in the process or "at any entrance and exit on the highway." For example, customers can first purchase wafers from a company and then enter Intel Corporation's wafer factory in the next step, or they can first work with an outsourced semiconductor packaging and testing company to complete traditional packaging, and then use Intel Corporation for advanced packaging. She said, "This is not something Intel Corporation would have done in the past. We have never accepted wafers from other customers before. This is a huge shift in mindset." An unnamed former Intel Corporation employee stated that Intel Corporation's target packaging customers may be cautious about announcing collaboration for two reasons: either they are waiting to see if the company can fulfill its commitment to expand its wafer factory, or they are concerned that once they announce the use of Intel Corporation's packaging services, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR may reduce the supply of wafers allocated to them. The former employee pointed out that the risk customers face is not the technology itself, but the broader market dynamics. However, Naga Chandrasekaran is more cautious in his attitude. He said, "I think we need to adhere to a principle very disciplined, we don't talk about customers. Successful foundries don't say 'we've signed these customers.' We want our customers to talk about our products." He also noted that a clear signal of a customer coming on board would be a significant increase in Intel Corporation's foundry business spending. He said, "As we sign these customers, we will have to increase our capital expenditures," adding, "the market will see that then."