Amkor to Build $2 Billion Plant in USA; Packaging Chips for TSMC, Apple

The project is anticipated to generate around 2,000 jobs and will collaborate with a significant chipmaking complex in the northwest Valley.

Introduction:

On the occasion of its one-year anniversary, Amkor Technology Inc., a prominent semiconductor packaging and testing services provider based in Tempe, has announced plans to construct an advanced facility in USA at an estimated cost of $2 billion. The project is anticipated to generate around 2,000 jobs and will collaborate with a significant chipmaking complex in the northwest Valley.

The company disclosed that it will undertake the packaging and testing of chips designed for Apple Inc. These chips will be manufactured at the nearby Taiwan Semiconductor Manufacturing Co. (TSMC) complex situated near Dove Valley Road and 43rd Avenue.

Amkor has successfully acquired approximately 55 acres of land for the development, with the intention of establishing a cutting-edge manufacturing campus spanning over 500,000 square feet of clean room space.

The initial phase of the manufacturing plant is slated to become operational within the next two to three years, signaling a significant stride in expanding Amkor’s manufacturing capabilities.

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Why Advanced packaging is Critical?

Basic packaging in the semiconductor industry involves a more straightforward approach to enclosing individual semiconductor components. It’s comparable to placing each piece of a puzzle into separate small boxes without much consideration for optimizing space or enhancing interconnectivity.

In basic packaging, the emphasis is on protection and physical containment, but it may lack the sophistication needed for high-performance applications.

On the other hand, advanced packaging goes beyond mere containment. It focuses on optimizing space, enhancing interconnectivity between different components, and addressing specific industry needs.

Image Credits: Semiconductor Engineering

Advanced packaging integrates multiple chips with diverse functions efficiently in a compact space. This sophistication is crucial for modern electronic devices, requiring protection, high performance, energy efficiency, and intricate inter-device communication.

Several strategies, including wafer-level packaging, bumping, redistribution layers, fan-out, and through-silicon vias, drive the evolution of next-gen advanced packaging. These strategies showcase the effective use of front-end wafer manufacturing technologies like deposition, etching, and cleaning in back-end processing.

In essence, advanced packaging is a more intricate and purposeful approach compared to the more rudimentary nature of basic packaging in the semiconductor industry.

Read More: What is 2D, 2.5D & 3D Packaging of Integrated Chips?

Amkor Packaging Strategic Investment in USA:

Amkor, valued at $7 billion in the stock market, stands among Arizona’s major public corporations. As of the end of 2022, the company’s workforce surpassed 31,000. The majority of employees are located in Asian countries, including South Korea, China, Japan, and Taiwan. However, its current employee count in Arizona is around 400.

Amkor holds a significant position in the semiconductor industry, with Apple and Qualcomm contributing 20.6% and 10.1% to its $7.1 billion revenue last year. The company’s strategic investment aims to improve the global supply chain for semiconductor packaging, a crucial process for enclosing semiconductors in various devices.

Amkor emphasizes advanced packaging’s importance for creating efficient devices that process data swiftly and energy-efficiently. Despite past oversight, industry sources recognize advanced packaging as crucial to semiconductor manufacturing.

The facility’s significance is further underscored by Amkor’s partnership with the tech giant Apple. Amkor will package and test chips for Apple, manufactured at a nearby TSMC facility. This collaboration positions Amkor as a key player in meeting Apple’s semiconductor needs and showcasing its capabilities for leading technology companies.

Read More: Amkor to Invest $1.6 Billion in Vietnam for Packaging & Assembly

Focus on High-Performance Computing:

The facility’s focus on high-performance computing reflects the growing demand for advanced semiconductor solutions in various industries.

As technology continues to evolve rapidly, the need for powerful and efficient computing capabilities has become paramount.

Amkor’s investment aligns with this trend, positioning the company to address the requirements of industries that rely on cutting-edge semiconductor technology.

Largest USA Advanced Packaging Facility by Amkor

Amkor Technology’s facility aims to become the largest outsourced advanced packaging facility in the United States.

“Expansion of a U.S. semiconductor supply chain is underway. As the largest U.S.-headquartered advanced-packaging company, we are excited to lead the charge in bolstering America’s advanced packaging capabilities.”

~Giel Rutten, Amkor’s president and CEO,

This not only highlights the scale of the project but also emphasizes the company’s commitment to advancing semiconductor manufacturing capabilities within the country.

Read more: What are the Various Types of Semiconductor Packaging

Amkor Government Support for Packaging in USA

Founded in 1968 in South Korea, Amkor established a presence in Phoenix in 1984. It is now positioning itself among semiconductor manufacturers, suppliers, and major players in the region. Notable companies in this landscape include TSMC, Intel, Applied Materials, and ASML.

U.S. Semiconductor Packaging
US puts 3 billion dollars into semiconductor packaging

Amkor has applied for federal funding through the CHIPS and Science Act, aiming to enhance American competitiveness, innovation, and national security in the semiconductor industry. The federal government, under the $52.7 billion program, plans to allocate $39 billion through competitive grants to support U.S. companies in facility construction, expansion, and modernization. Amkor underscores the critical importance of securing this funding for its Peoria project.

“This is a huge step forward to reducing dependence on other countries in the microchip supply chain. When negotiating the CHIPS and Science Act, one of my top priorities was making sure companies like Amkor had the support needed to develop a resilient supply chain in places like Arizona that are leading the way in bringing microchip manufacturing back to America.” 

~Arizona Senator Mark Kelly, a supporter and chief negotiator of the CHIPS and Science Act

TSMC’s concurrent investment in a massive chip fabrication facility in Arizona adds to the significance of Amkor’s project. TSMC’s commitment to advanced chip manufacturing positions Arizona as a hub for cutting-edge semiconductor production. This reinforces the region’s significance in the global semiconductor supply chain.

Read More: U.S. launches $3 billion Program for Advanced Semiconductor Packaging

Conclusion:

Amkor Technology’s $2 billion investment in the Arizona semiconductor facility is a milestone in U.S. semiconductor manufacturing. This marks a step towards reducing dependence on other countries in the microchip supply chain. It also strengthens the United States’ commitment to leading in packaging technologies globally.

Editorial Team
Editorial Team
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