Amazon plans in-house processors for Kindle, Fire TV to offset AI infrastructure spending

Amazon could pull an Apple for its next-gen Kindle and Fire TV chips

The transition is expected to begin in 2027, with Amazon reportedly partnering with Alchip and aiming to ship around 40 million in-house processors annually once the strategy is fully rolled out. Amazon appears to be preparing a major behind-the-scenes shake-up that could eventually affect nearly every gadget it sells, from your Kindle and Fire TV to Echo smart speakers and Ring doorbells. According to well-known industry analyst Ming-Chi Kuo, Amazon is planning to gradually shift away from off-the-shelf processors from third-party chipmakers and instead design more of its own silicon. The company wants greater control over the power that powers its devices. If this sounds familiar, that's because several tech giants have already taken a similar route. Apple designs its own A-series and M-series chips, giving it tighter control over performance and battery life. Google has its Tensor chips, while Amazon now seems interested in bringing that same philosophy to its consumer hardware lineup. For everyday users, this probably won't translate into overnight upgrades like dramatically faster Kindles or smarter Echo speakers. However, building chips in-house could give Amazon greater freedom to tailor hardware to its software and AI features while also reducing its dependence on external suppliers. There's another reason Amazon is making this move now: AI. Kuo notes that Amazon has been pouring enormous sums into AI infrastructure, putting pressure on its finances. With AI becoming one of the company's biggest spending priorities, Amazon is reportedly looking for ways to trim costs elsewhere. Developing custom processors for its own devices could be one way to save money over time while keeping tighter control over its hardware roadmap. The report also suggests that this decision could have ripple effects across the chip industry. Analyst Jukan, citing Kuo's findings, said companies that currently supply processors for Amazon devices, such as MediaTek, could stand to lose significant business if Amazon follows through with the transition. According to Kuo, Amazon has chosen Taiwanese chip design company Alchip as its exclusive partner for the back-end design and testing of these custom processors. While Amazon will oversee the chip strategy, Alchip is expected to play a key role in turning those designs into production-ready silicon. The transition reportedly won't happen overnight. Kuo says Amazon aims to kick off the shift in 2027, and once it's fully underway, the company could ship around 40 million of its own processors every year across its growing lineup of consumer devices. If that happens, it would mark one of Amazon's biggest hardware strategy changes in decades and another sign that custom silicon is quickly becoming the norm among the biggest names in tech.

Amazon could follow in Apple's footsteps by building its own processors -- here's what that means for future Kindles and Fire TVs

With AI causing skyrocketing production and data costs across the industry, Amazon could be taking the Apple route of bringing processor design in-house in an attempt to save money. The leak comes from supply chain analyst Ming-Chi Kuo who claims that Amazon is "moving away from externally sourced processors and adopting a COT (customer-owned model)." According to Kuo, this decision was made because of the rapid expansion of AI compute and Amazon is responding by streamlining and changing things in its "non-AI businesses." Part of that is a gradual shift away from external sourcing and taking control of processor development. Kuo says that Amazon is tapping AIchip for back-end design and testing with this strategy starting in earnest in 2027. AIchip is 23 year old companny based out of Taipei, Taiwan that designs silicon for other companies, specifically application-specific integrated cricuit (ASIC) chips. In general, these chips are designed, as the name implies for very specific functions. In recent years AIchip has developed 3nm chips used in AI servers for customers that include Amazon and Intel, per Taipei Times. Kuo claims that silicon designed by AIchip could appear in Amazon's devices, including the Kindle, Fire TV, Echo, Blink, Ring and Alexa-enabled products. Why it matters If Kuo's claims turn out to be true, this could take Amazon down a more Apple path. Until 2020, Apple used Intel silicon in its Macs before introducing the M1 CPU in November of that year. Meanwhile, the company had been using its own in-house A-series chips in the iPhone and iPad since 2010 with the introduction of the A4 chip. That silicon debuted on the iPhone 4 and the original iPad. Designing the chip in-house, even if itis built by partners like Samsung TSMC, gives Apple more control over integration and optimization leading to improved performance. What Amazon is already doing Notably, Amazon may have already started this transition with the new Echo speakers launched in October 2025. Those speakers feature two custom-designed chips; the AZ3 or the AZ3 Pro, which are specifically meant for ambient AI tasks. Per an Amazon blog post, the Echo Dot Max uses the AZ3 for detecting conversations, which is how the Echo enables users from anywhere in the room to talk to Alexa Plus AI. The Echo Studio, Echo Show 8 and Echo Show 11 all have the AZ3 Pro, which adds support for more language models and "vision transformers." Tom's Guide reached out to Amazon to confirm Kuo's report and was told no comment. Panos Panay confirms custom chips However, today, Amazon's hardware head Panos Panay indicated to CNBC on its "The Tech Download" podcasts that the company is designing its own AI chips. "On some of the more critical devices right now, our focus is end-to-end silicon, because to your point," Panay said and pointed out the Echo devices released last year and the Fire TV. "We definitely need to think about how that end-to-end delivery of hardware comes together," he added. Per CNBC, the focus seems to be on custom AI chips but also Panay said that the company is developing a "whole roadmap of on-the-go devices." He claimed that "you won't have to wait long" to see these new devices. Follow Tom's Guide on Google News and add us as a preferred source to get our up-to-date news, analysis, and reviews in your feeds.