Outsource semiconductor assembly and testing vendor Amkor Technology Inc. plans to build a $2 billion advanced facility in Peoria, Arizona. When completed, the factory will be the largest outsourced advanced packaging and test facility in the U.S.
The move is part America’s bid to become relevant in the semiconductor manufacturing sector after COVID-19 revealed flaws in the aggregated supply chain and caused massive shortages in various sectors globally. To boost not just a more stable supply chain but grab a piece of the chip industry that is expected to grow by 5% during this current decade, trade organizations, chip vendors and the U.S. government have undertaken massive steps to grow semiconductor manufacturing domestically.
This includes the $50-plus billion in incentives that will are being handed out through the CHIPS and Science Act that was signed into law in August of 2022. Since signing the bill, more than $200 billion in investments have been announced and 31 tech hubs have been granted.
The flurry of activity in chip manufacturing in the U.S. includes, but is not limited to:
- Intel building two new fabs in Ohio.
- TSMC building two fabs in Arizona.
- Samsung building a fab in Tyler, Texas.
- Micron building a new memory fab in Idaho.
- GlobalFoundries building a new facility in Malta, New York
Amkor’s $2 billion packaging and test facility can now be added to this growing list of mega-projects happening in the country as the company has applied for CHIPS funding.
“Semiconductor companies, foundries, and other supply chain partners understand the need to strategically broaden their geographic footprint,” said Giel Rutten, president and CEO of Amkor. “The announcement of our new advanced packaging and test facility in Arizona is a clear signal of our intent to help our customers ensure resilient supply chains and be a part of a strong American semiconductor ecosystem.”
The factory
The packaging and test facility will be built on 55 acres of land with a 500,000 square feet clean room space. The space will provide leading-edge packaging and testing of semiconductor for markets like high-performance computing, automotive and communications.
The first phase is targeted for production in the next 2 to 3 years and Amkor is working with Apple to test and package chips that will be produced for Apple at the upcoming Taiwan Semiconductor Manufacturing Co. (TSMC) double fab that is also being built in Arizona. Amkor said that when its factory opens, Apple will be its first and largest customer.
“As one of the first advanced packaging facilities in the U.S., this is a huge step forward to reducing dependence on other countries in the microchip supply chain,” said Mark Kelly, U.S. Senator in Arizona. “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.”
