Citi says TSMC’s AI chip lead is not under major threat from Intel yet

TSMC is expected to remain in a strong position in advanced AI chip manufacturing and packaging, despite Intel’s push to win more foundry and packaging business. A new Citi research view suggests that Intel still faces important supply chain limits before it can put serious pressure on TSMC in the AI and high performance computing market.

The main focus is advanced packaging. TSMC’s CoWoS packaging has become a key part of the AI chip boom because companies need it for powerful processors used in data centers. Demand has been high, and capacity is expected to grow further through 2026 and 2027 as AI hardware orders keep rising.

Intel is trying to compete with its EMIB T packaging technology. Reports have suggested that major tech companies, including Google, have shown interest in Intel’s packaging for future AI chips. EMIB T is different from traditional packaging because it relies more on organic substrates instead of a full silicon interposer. Intel says this approach can reduce costs and improve power and signal delivery.

Citi’s view is more cautious. The analyst says Intel’s EMIB T success depends heavily on the ABF substrate supply chain. ABF substrates are important materials used in advanced chip packaging, and if suppliers cannot scale production smoothly, Intel’s packaging growth may be limited.

The report also looks at Intel’s 18A process, which has been linked to possible interest from Apple and other major customers. Citi notes that tape out activity is common in the chip industry, but it does not always lead to large volume production. In other words, a company testing Intel’s process does not mean it will fully shift major chip orders away from TSMC.

That point matters because many AI and HPC chip designs planned for 2027 and 2028 are already locked in. If those products are already built around TSMC’s processes and packaging roadmap, Intel may not have an easy path to replace TSMC in the near term.

TSMC is also expected to benefit from more than CoWoS. Future technologies such as SoIC and CoPoS could create more demand in the coming years. These packaging methods may help TSMC support more complex chip designs as AI processors continue to grow in size, power needs, and performance targets.

Intel still has a real opportunity if it can prove strong execution, scale its packaging ecosystem, and win trust from large customers. But Citi’s view suggests that TSMC’s position in AI chips remains solid for now. Intel may gain selected deals, but catching TSMC at scale will likely take more than one promising packaging technology or one advanced manufacturing node.