Ming-Chi Kuo: Amazon shifts consumer electronics to self-developed processors to optimize cost structure

According to Golden Ten Data on July 2, analyst Ming-Chi Kuo stated that Amazon plans to develop its own consumer electronics processors to prepare for the ongoing AI infrastructure wave, aiming to reduce chip costs and reserve enough funds for AI investments. Amazon's free cash flow in Q1 2026 is only around $1.2 billion. Starting in 2027, Amazon plans to gradually adopt a COT (Customer-Owned Tooling) model, similar to that used for AI server chip Trainium, for processor development. Backend design and testing will be handled by Alchip. After the full transition, annual shipments are expected to reach 40 million units.