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Intel prioritizes advanced packaging to compete with TSMC in AI chip manufacturing
Thursday, February 19, 2026 at 03:00 AM
Intel is positioning its advanced packaging capabilities as a core strategy to regain market share in the AI semiconductor sector and compete with TSMC's foundry dominance. The company aims to leverage these back-end manufacturing technologies to reverse recent declines in CPU market share and struggles within its foundry business unit.
Context
Intel is aggressively expanding its advanced packaging capabilities, positioning back-end services as a primary weapon to challenge TSMC’s market dominance. By decoupling chip fabrication from packaging, Intel aims to attract high-margin AI customers who are currently facing supply constraints at TSMC. This strategy centers on proprietary technologies like Foveros and EMIB, which allow for higher transistor density and better energy efficiency in next-generation high-performance computing and AI accelerators.
The company plans to quadruple its advanced packaging capacity by 2025, leveraging multi-billion dollar investments in facilities across Malaysia and New Mexico. This expansion is critical as the global advanced packaging market is projected to reach approximately $65 billion by 2028. By offering these services as a standalone foundry option, Intel provides a vital alternative for companies like NVIDIA that are currently bottlenecked by TSMC's capacity limits. This move is a cornerstone of Intel’s broader goal to reclaim its position as a leading global foundry by 2030.
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