Amazon Considering Entering Semiconductor Market

Amazon is considering entering the semiconductor merchant market.

The company would be the fourth biggest chip company in the world if it sold its chips on the market, according to figures quoted by Amazon CEO Andy Jassy (pictured) in his letter to shareholders yesterday.

Jassy said that the Amazon chip business would have a $50 billion annual run rate if it were an independent business selling semiconductors to AWS customers and other third parties.

That would make it the fourth largest chip company by revenue  – behind Nvidia, Samsung and Hynix – and bigger  than Intel, Qualcomm, Broadcom and Micron.

“Graviton, which has up to 40% better price-performance than other x86 processors, is now used expansively by 98% of the top 1,000 EC2 customers,” said Jassy, “the same story arc is unfolding in AI. Our second version of our custom AI silicon (Trainium2) had about 30% better price-performance than comparable GPUs, and has largely sold out. Trainium3, which just started shipping at the start of 2026 and is 30-40% more price-performant than Trainium2, is nearly fully-subscribed. A significant chunk of Trainium4, which is still about 18 months from broad availability, has already been reserved.”

“Amazon Bedrock, AWS’s primary (and very fast-growing) inference service, runs most of its inference on Trainium,” added Jassy, “demand for Trainium is booming.

“Our annual revenue run rate for our chips business (inclusive of Graviton, Trainium, and Nitro—our EC2 NIC) is now over $20 billion, and growing triple digit percentages YoY,” continued Jassy, “to dimensionalize this versus other chips companies, that run rate is somewhat understated by our currently only monetising our chips through EC2. If our chips business was a stand-alone business, and sold chips produced this year to AWS and other third parties (as other leading chips companies do), our annual run rate would be ~$50 billion. There’s so much demand for our chips that it’s quite possible we’ll sell racks of them to third parties in the future.”