Apple and Amkor bolster US semiconductor packaging power with US$2B national facility

05 Dec 2023 --- Apple and Amkor Technology have announced an expanded partnership that will see the development of the largest outsourced advanced packaging facility in the US. Amkor projects to invest US$2 billion toward the new facility in Peoria, Arizona.

The new Amkor manufacturing and packaging facility will package Apple silicon processors produced at the nearby Taiwan Semiconductor Manufacturing Company (TSMC) fab. The collaboration aims to strengthen America’s semiconductor supply chain and aligns with the US government’s efforts to rebuild domestic semiconductor manufacturing.

“Expansion of a US semiconductor supply chain is underway and as the largest US-headquartered advanced packaging company, we are excited to lead the charge in bolstering America’s advanced packaging capabilities,” says Giel Rutten, Amkor’s president and chief executive officer.

“Semiconductor companies, foundries and other supply chain partners understand the need to strategically broaden their geographic footprint. The announcement of our new advanced packaging and test facility in Arizona clearly signals our intent to help our customers ensure resilient supply chains and be a part of a strong American semiconductor ecosystem.”

Amkor details that it is the only US-headquartered OSAT (outsourced semiconductor assembly and test) service provider with advanced packaging technology capability and high-volume manufacturing experience. “Upon completion, this will be the largest outsourced advanced packaging facility in the US,” says the company about the new project.

Amkor’s US$2 billion project is one of the largest microchip investments announced in Arizona since the passage of the CHIPS Act last year.Amkor has secured 55 acres of land for the manufacturing campus, featuring over 500,000 square feet of “clean room” space. The plant’s first phase is expected to be ready for production within three years, supporting critical markets such as high-performance computing, automotive and communications.

Advancing US semiconductor industry
The project has reportedly received strong support from the City of Peoria, the Arizona Commerce Authority and government authorities. Amkor has applied for funding under the CHIPS and Science Act, a program designed to boost US competitiveness, innovation and national security in the semiconductor industry.

The federal government is set to award US$39 billion in competitive grants to manufacturers, providing financial support for Amkor’s project.

“Amkor’s US$2 billion project — one of the largest microchip investments announced in Arizona since the passage of the CHIPS Act last year — will create good-paying jobs, strengthen our local economy and help protect our national security,” Arizona’s Senator Mark Kelly remarks.

“As one of the first advanced packaging facilities in the US, 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 ensuring 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.”

Boosting supply chains and jobs
Apple’s investment in advanced manufacturing aligns with its 2021 commitment to invest US$430 billion in the US economy over five years. The tech giant says its collaboration with Amkor signifies a significant step toward building a resilient supply chain, reducing dependence on other countries, and further establishing the US as a leader in the semiconductor industry.

“Apple is deeply committed to the future of American manufacturing and we’ll continue to expand our investment here in the US,” says Jeff Williams, Apple’s chief operating officer. Amkor worked closely with Apple on the Peoria facility’s strategic vision and initial manufacturing capability, which will package and test chips produced for Apple.

“Apple silicon has unlocked new levels of performance for our users, enabling them to do things they could never do before, and we are thrilled that Apple silicon will soon be produced and packaged in Arizona.”

In a recent Congressional testimony, Commerce Secretary Gina M. Raimondo highlighted advanced packaging as a significant area of focus for the US government’s effort to rebuild American semiconductor manufacturing. The Commerce Department made clear that developing robust advanced manufacturing capacity and capability are key priorities and essential to the success of the CHIPS program.

Governor of Arizona Katie Hobbs stresses that Amkor’s announcement is “a historic step forward for Arizona that will bolster America’s national security and build a more resilient supply chain, bring billions of dollars into the state and create thousands of good-paying jobs for Arizona workers.”

“I was glad to meet with the Arizona Commerce Authority and Amkor leadership in South Korea to discuss future investments in Arizona and am proud to have them as a partner. Together, we’ll continue to expand the semiconductor ecosystem and continue Arizona’s long history of leadership in the advanced manufacturing sector.”

Chip manufacturing and packaging
Amkor plans to provide high-volume, leading-edge technologies for advanced packaging and testing of semiconductors. The company worked closely with Apple on the Peoria facility’s strategic vision and initial manufacturing capability, which will package and test chips produced for Apple at the nearby TSMC fab.

Dr. CC Wei, chief executive officer of TSMC, applauded Amkor for investing in the semiconductor industry’s future: “Amkor has been a strategic OSAT partner to TSMC for many years,” says Wei. “We share Amkor’s excitement for its significant investment and the value this facility will bring to TSMC, our customers and the ecosystem.”

Meanwhile, Amkor’s president and chief executive officer adds that the new facility, combined with the company’s advanced facilities spanning Asia and Europe, strengthens its broad geographic footprint, supporting global and enabling regional supply chains.

“This investment will reinforce our leadership position in advanced packaging and test within the key markets we serve while solidifying our commitment to expanding US-based chip manufacturing,” underscores Rutten.

By Radhika Sikaria

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