Amkor Technology has signed a non-binding preliminary memorandum of terms with the US Department of Commerce to receive proposed funding as part of the CHIPS and Science Act, according to the US semiconductor packaging and test services provider.
The Biden-Harris Administration also announced the signing of the PMT, which would give Amkor up to US$400 million in proposed direct financing under the CHIPS and Science Act. This proposed funding would support Amkor's investment of approximately US$2 billion and 2,000 jobs in a greenfield project in Peoria, Arizona.
Amkor in November 2023 disclosed plans to build its Arizona plant, which the OSAT claims will be the largest outsourced advanced packaging and test facility in the US. It will offer complete end-to-end advanced packaging for the world's most advanced semiconductors used in high-performance computing, artificial intelligence, communications, and automotive device applications.
Amkor will have access to US$200 million in proposed loans under the terms of the PMT, in addition to direct funding. Amkor also plans to claim the Department of the Treasury's Investment Tax Credit, which is expected to be up to 25% of qualified capital expenditures.
Advanced packaging technology for US
The Biden-Harris Administration stated that it will contribute to the resilience of key advanced packaging technologies, which will benefit US economic and national security by ensuring a dependable domestic advanced packaging ecosystem, supporting leading-edge clusters, and assisting in meeting the growing demand for AI chips. As a result, businesses such as TSMC, Apple, and GlobalFoundries, which power the world's most advanced technologies, will be able to package and test essential chips locally, allowing the entire chip manufacturing cycle to be completed in the US.
As chip design approaches the technical limits of Moore's Law, advanced packaging is often viewed as the industry's next frontier of innovation due to its ability to drive greater power and performance. As a result of the planned CHIPS funding for Amkor's Arizona location, the US will significantly increase domestic capacity for this critical component of the semiconductor supply chain, strengthening the country's technology supremacy.
"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," said US Secretary of Commerce Gina Raimondo. "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."
"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," said Under Secretary of Commerce for Standards and Technology and National Institute of Standards and Technology Director Laurie E. Locascio. "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."
Amkor's US$2 billion advanced packaging fab project
Amkor has secured approximately 55 acres with the intent to build a state-of-the-art manufacturing campus with more than 500,000 square feet of clean room space. The first phase of the manufacturing facility is targeted to be ready for production within three years, according to the company.
Amkor and TSMC have been working closely to provide high volume, leading-edge technologies for advanced packaging and testing of semiconductors to support critical markets such as HPC, automotive, and communications, said the US-based OSAT. The companies' shared vision is to enable seamless technology alignment for customers across a global manufacturing network.
"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 CEO. "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."
When disclosing the fab project in end-2023, Amkor stated that the company collaborated closely with Apple on the strategic vision and initial manufacturing capability of the Peoria plant, which will package and test chips produced for Apple at the nearby TSMC fab. Apple will be its first and largest customer when the new facility opens.
