Shares of Intel (INTC) rose on Monday amid growing optimism that the chipmaker could secure a significant new customer for its semiconductor packaging technology, strengthening investor confidence in the company’s foundry ambitions.
Intel stock climbed 3% to $128.76 in afternoon trading, extending a remarkable rally that has seen the shares surge more than 225% this year.
The latest gains followed reports that South Korean memory-chip maker SK Hynix is in discussions with Intel over the use of its advanced packaging technologies for integrating high-bandwidth memory chips with logic semiconductors.
According to a report by ZDNet Korea, SK Hynix has started joint research and development work with Intel focused on 2.5D packaging technology.
The company is also reportedly considering the adoption of Intel’s Embedded Multi-Die Interconnect Bridge, or EMIB, technology.
Packaging business gains attention
The potential partnership would mark a notable breakthrough for Intel’s foundry and advanced packaging operations, which have struggled to attract major external clients despite billions of dollars in investment.
Intel has positioned EMIB as an alternative to the widely used Chip-on-Wafer-on-Substrate, or CoWoS, packaging technology developed by Taiwan Semiconductor Manufacturing Company.
Packaging technology has become increasingly important in the artificial intelligence era, as semiconductor companies seek ways to combine memory and processing chips more efficiently while improving power consumption and computing performance.
“Intel’s EMIB offers several advantages over CoWoS. By embedding small silicon bridges directly into the substrate for die-to-die connections, EMIB eliminates the need for a large and costly interposer, simplifying the structure and improving manufacturing yields,” wrote analysts at research firm TrendForce.
However, the firm also noted that Intel’s technology may face limitations in bandwidth and latency relative to TSMC’s solution.
Global shortage creates opportunity
The reported discussions come at a time when the semiconductor industry continues to grapple with a shortage of advanced packaging capacity, driven largely by surging demand for AI chips.
TrendForce said TSMC’s CoWoS technology has faced a severe supply-demand imbalance in recent years, prompting customers to explore alternative packaging providers.
That environment has created opportunities for companies, including Amkor Technology and Intel, both of which have been trying to expand their footprint in the advanced packaging market.
Despite recent momentum, Intel remains significantly behind TSMC in global market share.
TrendForce estimates Intel currently controls around 13.7% of worldwide 2.5D packaging capacity, compared with TSMC’s nearly 70% share.
TSMC is expected to expand its packaging capacity by more than 60% by 2027, which analysts believe could gradually ease current supply bottlenecks across the industry.
Foundry strategy under scrutiny
Investors have increasingly focused on Intel’s efforts to reinvent itself as a major contract chip manufacturer amid intensifying global demand for AI infrastructure.
Until now, Intel’s foundry division has struggled to secure large-scale external customers, apart from a previously announced partnership with Elon Musk-linked Terafab, aimed at serving Tesla and related businesses.
A partnership with SK Hynix would therefore represent an important endorsement of Intel’s technology and manufacturing capabilities.
Intel executives have also signalled growing customer interest in the company’s packaging solutions.
Speaking at a conference hosted by Morgan Stanley earlier this year, Intel chief financial officer David Zinsner said EMIB and the more advanced EMIB-T platform had generated “really good engagement” from customers.
Separately, multiple media reports have indicated that Apple and Intel are exploring a potential manufacturing partnership, further fuelling speculation that Intel’s foundry strategy may finally be gaining traction.
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