Renowned analyst Ming-Chi Kuo has revealed that Amazon, in light of the burgeoning AI infrastructure landscape, is poised to embark on designing its proprietary processors for consumer electronics. This strategic move aims to slash chip expenses and reallocate resources towards AI endeavors. Given that Amazon's free cash flow in the first quarter of 2026 stood at a mere 5% of the previous year's level, thereby constraining its financial agility, the previously outsourced processor procurement has emerged as a prime candidate for cost-cutting and operational optimization.

Amazon, boasting a diverse portfolio of consumer electronics, intends to leverage a Chip-on-Top (COT) architecture—akin to the approach adopted for its AI server chip, Trainium—to commence processor development from 2027 onwards. Alchip will be entrusted with the backend design and testing phases. It is anticipated that once the transition is fully realized, Amazon's annual processor shipments will soar to 40 million units.