Intel's Foundry Ambitions: Scaling Up to Challenge the Packaging Giants

Intel advances EMIB packaging to build larger AI chip packages, supported by US CHIPS Act funding and a new Malaysia facility, aiming to compete with TSMC and Samsung.

Intel is addressing a critical gap in its foundry strategy: the capability to manufacture exceptionally large and complex AI chip packages. Success in this endeavor could meaningfully alter the competitive landscape against industry leaders TSMC and Samsung.

A Strategic Push Beyond Current Limits

Central to this effort is the advancement of Intel's EMIB (Embedded Multi-die Interconnect Bridge) technology, a 2.5D packaging method that links multiple semiconductor dies within a single housing. According to industry reports, the company is targeting package sizes reaching 120x120mm, which would surpass the current industry standard for cutting-edge AI processors. Packages of this scale could accommodate a minimum of twelve HBM (High Bandwidth Memory) stacks, a significant increase from the eight stacks commonly used today. Further expansions to formats measuring 120x180mm are reportedly slated to follow by 2028.

Manufacturing capacity for these advanced packages will be supported by a new packaging facility in Malaysia, which is scheduled to commence operations later this year.

Foundry Strategy Gains Momentum with US Support

The expansion of Intel's manufacturing footprint is being accelerated by funding from the U.S. CHIPS and Science Act. Investments are flowing into sites in Arizona, New Mexico, Ohio, and Oregon to boost capacity for both logic chips and advanced packaging technologies. While some projects, including the Ohio facility, have experienced timeline adjustments, the overarching objective of establishing a resilient domestic semiconductor supply chain remains firmly in place.

These packaging innovations form a cornerstone of Intel's IDM 2.0 strategy, through which the chipmaker aims to establish itself as a major global contract manufacturer. Advanced packaging solutions are increasingly vital, as more chip designs rely on integrating multiple chiplets into one package.

Process Roadmap and Packaging: A Dual Approach

Progress continues in parallel on Intel’s ambitious "five nodes in four years" manufacturing roadmap. The 18A process node, which incorporates new transistor and power delivery technologies, has already entered high-volume manufacturing. The company believes that combining this advanced node with superior packaging capabilities will be key to attracting external customers—precisely those clients who have historically relied almost exclusively on TSMC for production.

Intel's stock has appreciated by approximately 19% since the start of the year. The medium-term success of its foundry strategy in convincing major external clients will become clearer when the Malaysian complex becomes operational and begins allocating its initial capacity for outside customers.