Amkor has signed a non-preliminary memorandum of terms with the U.S. Department of Commerce to receive up to $400 million in proposed funding under the CHIPS and Science Act, set to result in the ‘largest’ outsourced advanced packaging and test facility in America.
In November 2023, Amkor revealed its intentions to build its first outsourced semiconductor assembly and test (OSAT) facility in Peoria, Arizona. It was expected to package Apple silicon produced at the nearby TSMC fab, with the latter said to share Amkor’s vision of seamless technology alignment for customers across a global manufacturing network.
Now expecting to invest around $2 billion and create high-tech jobs for around 2,000 people, Amkor anticipates that the new facility will be the largest of its kind in the United States.
It is thought to be instrumental in ‘establishing a robust and resilient domestic supply chain’, helping to bolster competitive semiconductor manufacturing innovation within the country while enabling Amkor to serve as a strategic manufacturing partner for semiconductor companies, foundries, and OEMs around the world.
Furthermore, the project is believed to increase economic energy throughout the Greater Phoenix area, with the facility’s location set to ‘uniquely position Amkor among a strong ecosystem of front-end fabs, IDMs, and suppliers’. Approximately 55 acres of land have been secured by Amkor, wherein it plans to build a state-of-the-art manufacturing campus featuring over 500,000 square feet of clean room space.
The terms include up to $400 million in proposed direct funding, as well as access to $200 million in proposed loans. Amkor also plans to utilize the Department of the Treasury’s Investment Tax Credit, which is estimated at up to 25% of qualified capital expenditures.
The manufacturing facility’s first phase is scheduled to be ready for production within three years.
“Amkor is proud to be the leading advanced packaging and test OSAT headquartered in the US, and today’s announcement underscores our commitment to grow America’s domestic semiconductor ecosystem,” said Giel Rutten, Amkor’s president and chief executive officer at Amkor. “Amkor’s Arizona facility will enable us to support the growing semiconductor manufacturing community—while creating 2,000 good jobs—and we look forward to providing our customers with domestic advanced packaging and test capabilities.
“Advanced packaging is an essential component of semiconductor innovation and manufacturing, and we appreciate our partners at the Department of Commerce for recognizing the importance of this sector as they work to support our industry.”
Advanced packaging itself is a ‘major area of focus’ for the U.S. government as it seeks to boost semiconductor manufacturing in America, according to commerce secretary Gina M. Raimondo. Apparently, the CHIPS for America programme – projected to award $150 million in federal funding and leverage private sector investments from industry and academia – considers developing ‘robust’ manufacturing capacity and capability for advanced packaging ‘essential’ to its success.
U.S. Secretary of Commerce Gina Raimondo continued: “One of the fundamental goals of the CHIPS and Science Act is creating an advanced packaging ecosystem in the U.S. to ensure full start-to-finish chip production occurs domestically. Advanced packaging drives chip innovation at all levels, and because of President Biden’s leadership, the U.S. will have a robust domestic footprint in this critical technology.
“The leading-edge chips that will be packaged right here in Arizona are foundational to technologies of the future that will define global economic and national security for decades to come. Thanks to the Biden-Harris Administration, and Amkor’s investments in the U.S., this proposed funding would enhance our supply chain security, create thousands of jobs in Arizona, and further position the United States to out-innovate, out-build, and out-compete the rest of the world.”
According to Laurie E. Locascio, under secretary of Commerce for Standards and Technology and National Institute of Standards and Technology director, “the Biden-Harris Administration has committed to making the U.S. a world leader in advanced packaging, which is so critical to the future of the semiconductor industry because it allows us to pack more capability onto every chip. Investments in semiconductors will not succeed without investments in advanced packaging and with this proposed CHIPS funding, Amkor could play a crucial role in the U.S. semiconductor ecosystem.”
Arizona Governor Katie Hobbs adds: “Amkor’s Arizona expansion represents the most significant advanced packaging facility in the United States, reshoring a critical part of the semiconductor supply chain back to North America. This investment means good, durable jobs for Arizonans and that we will remain on the leading edge of the global economy for generations to come.”
“Amkor’s advanced packaging and test facility will support leading-edge chipmaking in Arizona, further bolstering U.S. supply chain resiliency and emphasizing Arizona’s prominence for advanced packaging technology,” concludes Sandra Watson, president and CEO, Arizona Commerce Authority. “We are so grateful to Amkor for their continued investment in Arizona and thank the Biden Administration, the Commerce Department and CHIPS Program Office, Governor Hobbs, and all our partners for their continued support.”
The news comes after the U.S. Department of Commerce issued a Notice of Intent (NOI) last month; it opened a competition for new R&D deliveries to secure and drive domestic capacity for semiconductor advanced packaging. Coordinated investments are expected to support integrated R&D activities to optimize domestic capacity.
Meanwhile, the Biden-Harris Administration has released a report proposing a plastic pollution strategy, involving the phasing out of all single-use plastics across US federal government agencies by 2035 and all single-use plastic products in foodservice, packaging, and events by 2027. This is said to be the first time the federal government has formally acknowledged the severity of the plastic pollution crisis.
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