Intel Aims for Fast Profitability in Chip Packaging Services

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Intel’s CEO, Patrick Gelsinger, recently shared at a Deutsche Bank event that the company plans to attract customers to its contract services by offering chip packaging, and the Chief Financial Officer, David Zinsner, stated at a Citi conference that this particular service offers a relatively fast path to profitability.

“Packaging looks very attractive to us. In this area, we can generate significant revenue in a relatively short time frame, measured in months, not years. In the silicon processing space, it takes years to break even,” explained Zinsner. Like the CEO, he believes that attracting customers to chip packaging services will eventually transition them into the silicon processing segment. While chip packaging services may not significantly impact Intel’s overall business, their value lies in expanding the customer base.

Moreover, Zinsner acknowledged that the profit margins in the advanced packaging services are not as low as one might expect. At least in terms of operating profit margins, chip packaging services are expected to be competitive with Intel’s overall business averages.

The company is also keen on returning the overall profit margin to above 60%, which is currently approximately 15 percentage points lower. According to the CFO, Intel’s return to technological leadership will enable it to raise the profit margin to the desired level. However, this is not expected to occur before 2025, as Intel plans to master the “angström” 18A manufacturing process by that time, surpassing its main competitors in lithography.

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Martin Harris
I'm Martin Harris, a tech writer with extensive experience, contributing to global publications. Trained in Computer Science, I merged my technical know-how with writing, becoming a technology journalist. I've covered diverse topics like AI and consumer electronics, contributing to top tech platforms. I participate in tech events for knowledge updating. Besides writing, I enjoy reading, photography, and aim to clarify technology's complexities to readers.

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