A global race to build AI infrastructure is unleashing billions of dollars of investment in advanced chip packaging, a once unglamorous aspect of technology that has become a critical bottleneck in turning out the world's most powerful processors.
As demand for artificial intelligence chips outstrips available packaging capacity, companies from Nvidia and AMD to lesser-known players in Taiwan are expanding production, while equipment makers develop new tools, interviews with more than a dozen industry executives and analysts show.
"Packaging was always that thing that you just didn't worry about," former Intel chief executive Pat Gelsinger, now a partner at Playground Global, told reporters in Taipei recently.
Advanced packaging could eventually account for as much as half the value of a chip product, Gelsinger estimated, as some of today's graphics and central processing units can integrate 10 or more chips, sometimes as many as 20.
Revenue from advanced packaging is forecast to overtake that earned via the traditional route for the first time in 2026, says research firm Yole Group, with capital spending on the technology expected to near $28 billion.