Amkor to Build Advanced Chip Packaging Facility in the US
Amkor, a leading provider of OSAT (outsourced semiconductor assembly and test) services, announced on Tuesday plans to build an advanced chip packaging facility in the US. The company plans to invest approximately $2 billion in the new facility, which will be located in Arizona and will be used to package chips produced by TSMC at a nearby factory. Apple is set to become the biggest customer of the facility.
The upcoming advanced packaging facility near Peoria, Arizona, will feature a massive 55-acre state-of-the-art manufacturing campus, with over 500,000 square feet (46,451 square meters) of cleanroom space when fully built and equipped. The initial phase of the Peoria factory, which will utilize Amkor’s advanced packaging and chip testing technologies for computer, automotive, and communications applications, is expected to be operational within two to three years, or by 2025 or 2026.
“The expansion of a semiconductor supply chain in the US is underway and, as the largest US-based advanced packaging company, we are excited to lead the effort to strengthen America’s advanced packaging capabilities,” said Giel Rutten, President and CEO of Amkor, in a press release. (Image credit: Amkor)
Amkor said it extensively collaborated with Apple to shape the strategic direction and initial production capacity of the Peoria facilities, implying that the factory will be tailored to Apple’s needs in two to three years. Apple will be the first and largest customer of the facility, using it to package and test chips produced at nearby TSMC Fab 21. “Apple is committed to helping build a new era of advanced manufacturing, right here in the US,” said Jeff Williams, Apple’s COO, in a statement. “Apple and Amkor have worked together for over a decade packaging chips extensively used in all Apple products, and we are excited that this partnership will now provide the largest OSAT advanced packaging facility in the US.”
The project will require an investment of approximately $2 billion and is expected to create approximately 2,000 jobs, making a significant contribution to the local economy. “$2 billion is a pretty big amount for a chip testing and packaging facility. To put the number in context, TSMC is expected to spend $2.87 billion on its next advanced packaging facility in Taiwan, which is expected to be completed by 2027,” stated the press release. Additionally, modern packaging technologies require production tools that are used to produce logic chips and are quite expensive. For Amkor, $2 billion is also a huge sum. Last year, the company’s total capital expenditures reached $908 million, so the cost of the new facilities will exceed its CapEx budget for two years.
To ensure the completion of the project in the US, Amkor has applied for funding from the CHIPS program (Advanced Packaging-Oriented Semiconductor Program, to be more accurate). The advanced Amkor facility is a good candidate to obtain funding from the US government, as it vastly strengthens the American semiconductor supply chain and enables customers of TSMC’s Fab 21 in Arizona to use advanced packaging methods without shipping their wafers out of the state.
“Semiconductor companies, foundries, and other supply chain partners understand the need to strategically expand their geographic presence,” Rutten said. “The announcement of our new advanced packaging and testing facilities in Arizona is a clear signal of our intent to help our customers secure resilient supply chains and be part of a strong American semiconductor ecosystem.”
“As one of the first advanced packaging facilities in the US, this is a major step towards reducing reliance on other countries in the microchip supply chain,” said Arizona Senator Mark Kelly. “In negotiating the CHIPS and Science Act, one of my top priorities was to ensure that companies like Amkor had the necessary support to develop a resilient supply chain in places like Arizona, which are leading the way in bringing microchip manufacturing back to America.”