Intel Bets Big on Advanced Chip Packaging
▼ Summary
– Intel’s Fab 9 in Rio Rancho, New Mexico, was reactivated in January 2024 after being dormant since 2007.
– The facility received billions in investment, including $500 million from the US CHIPS Act, for advanced chip packaging.
– Advanced packaging combines multiple chiplets into a single custom chip and is a key part of Intel’s Foundry business.
– Intel is positioning this packaging technology as a competitive differentiator against larger rivals like TSMC, especially for AI chips.
– The company projects its packaging revenue will exceed $1 billion, reaching the market before significant revenue from wafer production.
Sixteen miles north of Albuquerque, a sprawling Intel campus in Rio Rancho, New Mexico, has been given a new lease on life. This facility, originally built decades ago on former farmland, had seen one of its key fabrication plants, known as Fab 9, fall silent in 2007. The idled space reportedly became home to local wildlife as Intel’s fortunes wavered. That changed dramatically in early 2024, when the company revived the dormant fab after investing billions, including a $500 million award from the federal CHIPS Act. Today, Fab 9 and the adjacent Fab 11X form the backbone of Intel’s strategic push into advanced chip packaging.
This technology is central to modern semiconductor design. It involves assembling multiple specialized chiplets into a single, powerful processor unit. Over recent months, Intel has indicated that this packaging operation, housed within its Foundry business unit, is experiencing rapid expansion. The move positions Intel in direct competition with the industry giant, Taiwan Semiconductor Manufacturing Corporation (TSMC), which still commands a far larger manufacturing scale. However, the surging demand for artificial intelligence computing has created a unique opportunity. As major tech firms increasingly explore designing their own custom chips, Intel believes its packaging expertise can secure it a significant role in the AI supply chain.
Company leadership has been vocal about this segment’s potential. During a quarterly earnings call in January, Intel CEO Lip-Bu Tan stated the company’s advanced packaging capabilities serve as a major competitive advantage. Chief financial officer Dave Zinsner echoed this sentiment on the same call, noting that revenue from packaging services is expected to materialize even before substantial income from wafer production begins. Zinsner revealed that his financial forecasts for this business have been revised upward substantially over the past year and a half, shifting from an expectation of hundreds of millions of dollars to projections now well north of $1 billion.
(Source: Ars Technica)
