Prior to passage of the $52 billion US CHIPS Act in 2022, chip packaging and testing industry officials raised concerns that most of the billions could go to chip fabrication companies like Intel and Micron while overlooking the full chip production cycle. Their message got through and the Biden administration has been doling out preliminary awards focused on promoting end stage packaging and testing to help the US become more self-sufficient in the complete process.
On Friday, the government announced a non-binding deal to provide $400 million for Amkor Technology to support a $2 billion greenfield project in Peoria, Arizona, for a full end-to-end advanced packaging of chips for HPC, AI, auto, communications and other end markets. Amkor is the biggest US-based outsourced semiconductor assembly and test company (OSAT).
The facility will mean companies like TSMC, Apple and Global Foundries will be able to package and test their chips in the US. “Advanced packaging is widely believed to be the next frontier of innovation in the industry through its ability to drive enhanced power and performance,” CHIPS officials said in a statement. Goals of the CHIPS Act include ensuring “full start to finish chip production occurs domestically,” noted US Commerce Secretary Gina Raimondo.
Amkor CEO Giel Rutten said the project will create 2,000 jobs. The facility is expected to package chips based on 2.5D technology, foundational in AI and the creation of GPUs. A lack of 2.5D technology has been a “significant chokepoint” in the chip industry’s ability to meet increasing demand for Gen AI products and services.
Amkor was founded in 1968 and its revenues reached $6.5 billion in 2023. The company said it has secured 55 acres for its manufacturing campus to include 500,000 square feet of clean room space. Amkor said it has worked closely with TSMC to provide advanced packaging and testing of chips.
In addition to the proposed $400 million grant, Amkor is expected to claim a 25% tax credit on its qualified capital expenditures and received a proposed $200 million loan under the CHIPS Act.
Industry officials praised the CHIPS proposed award and Amkor’s investment. “We commend A kor for investing ambitiously in US-based advanced packaging, which is an area that needs to be strengthened in the US chip ecosystem, and we salute the US Commerce department for continuing to make impressive headway in getting CHIPS Act incentives out the door in a timely and effective manner,” said Semiconductor Industry Association CEO John Neuffer in a statement.
SIA has tracked $30.4 billion in grant awards under the CHIPS Act to 14 companies across 24 projects in 14 states. In April, Samsung received a proposed CHIPS grant of $6.4 billion to be used to build fabrication and advanced packaging facilities in Taylor, Texas, but reports indicate the fab portion has been delayed. In March, Intel won a proposed award of $8.5 billion to support chip production and packaging, with two modernization projects for packaging in Rio Rancho, NM. Other major proposed grants include $1.3 billion to GlobalFoundries, $6.6 billion to TSMC and $6.1 billion to Micron. The total $52 billion CHIPS Act authorization included $39 billion intended for chip fabrication and packaging, $11 billion for research and $2 billion for defense projects.
The Commerce Department recently announced a $1.6 billion competition for new R&D to boost domestic advanced packaging.
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