Amazon plans in-house chips for Kindle, Fire TV, and Echo devices

Amazon could be preparing for one of the biggest hardware strategy shifts in its history. According to supply chain analyst Ming-Chi Kuo, the tech giant plans to gradually replace third-party processors with custom-designed chips across its consumer electronics portfolio, marking its first major processor procurement overhaul in nearly two decades. The transition is expected to begin in 2027.

Amazon's extensive chip plans

Kuo says Amazon intends to adopt a Customer-Owned Tooling (COT) model for its in-house processors—the same approach it already uses for its Titanium AI chips. Under this strategy, Amazon will design the chips internally while relying on manufacturing partners for production, reducing its dependence on external chip suppliers.

The move is expected to span much of Amazon's consumer hardware lineup, including Kindle e-readers, Fire TV devices, Echo smart speakers and displays, Alexa-enabled products, Blink security cameras, and Ring video doorbells.

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Kuo also claims Amazon has selected Alchip as its exclusive partner for backend chip design and testing. Once the transition is complete, annual shipments of Amazon's in-house processors are estimated to reach around 40 million units.

Why is Amazon making this move now?

The shift appears to be largely driven by financial considerations. According to Kuo, Amazon's free cash flow for the 12 months ending in Q1 2026 plunged 95 percent year over year to around $1.2 billion as the company ramped up spending on AI infrastructure.

The strategy also aligns with comments from Amazon's hardware chief, Panos Panay, who recently confirmed that the company already develops custom silicon for devices such as the Echo Show and Fire TV lineup. While he did not comment on Kuo's report or any future products, Panay said Amazon plans to expand its in-house chip efforts, signalling a broader push toward proprietary silicon for next-generation AI-powered devices. He also teased "a whole roadmap of on-the-go devices," suggesting Amazon's chip ambitions extend well beyond the smart home.