Projects to build advanced packaging factories in the United States are on the rise.
Amkor Technology, the largest outsourced semiconductor assembly and test (OSAT) provider in the United States, has signed a preliminary agreement with the U.S. government to fund its new advanced chip packaging and testing facility in Peoria, Arizona. The facility, which will cost $2 billion, will be located near TSMC's upcoming Fab 21 complex in Arizona to support customers who manufacture chips there.
Amkor's new factory near Peoria, Arizona, will become the largest of its kind in the United States. The company has acquired 55 acres of land for the campus, which will include more than 500,000 square feet (46,451 square meters) of cleanroom space once fully built and equipped. To give a sense of scale, this cleanroom area will be more than double the cleanroom space of Amkor's advanced chip packaging facility in Vietnam.
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Amkor has not disclosed the capacity of the upcoming campus or which technologies it will support (which will meet Apple's requirements), but stated that the new packaging factory will serve the automotive, high-performance computing, and mobile applications, so there is reason to expect it to provide a wide range of traditional, 2.5D, and 3D packaging technologies and services.
The initial construction phase of the Peoria, Arizona factory is expected to take 3 years, with operations starting in 2027. The OSAT factory is adjacent to Intel Foundry and TSMC's wafer fab in Arizona, allowing chip design companies using the aforementioned wafer foundry services to package their chips in the state. Essentially, Amkor's facility enables a robust domestic semiconductor supply chain and positions Amkor as a key partner for fabless chip design companies and wafer foundries.
In fact, Amkor and TSMC have a close working relationship and collaborate to meet their mutual customer needs in Taiwan. This collaboration is expected to ensure seamless connectivity of technology in the global manufacturing network, so that companies like Apple and Nvidia can produce and package the same chips in Taiwan and the United States. Meanwhile, given the timelines of TSMC's Fab 21 (Phase 1 to be online in 2025) and Amkor Arizona (to start operations in 2027), the first chips packaged by Amkor's new factory will be produced using TSMC's N5, N5P, N4, N4P, and N4X processes.
Amkor has worked extensively with Apple on the strategic vision and initial manufacturing capabilities of the Peoria factory, which will package and test chips manufactured at the nearby TSMC factory for Apple. After opening, Apple will become the first and largest customer of the facility. Apple has publicly acknowledged Amkor's packaging facility in Arizona and stated that it will use TSMC and Amkor's services in Arizona to manufacture and package its chips. Given the company's usual tight-lipped attitude, the commitment to TSMC and Amkor is a significant move, possibly to persuade the U.S. government to fund these projects.The facility requires an investment of 2 billion US dollars and will create approximately 2,000 jobs. The agreement reached with the US Department of Commerce outlines potential funding, including 400 million US dollars in direct financial support, as well as 200 million US dollars in loans under the CHIPS and Science Act. In addition, Amkor plans to benefit from investment tax credits, which can cover up to 25% of its eligible capital expenditures.
The US chip act provides 3 billion US dollars in funding for advanced packaging
In November 2023, the US government launched the National Advanced Packaging Manufacturing Program (NAPMP) with a budget of about 3 billion US dollars. This is the first major R&D investment plan released under the CHIPS and Science Act of 2022, aimed at improving the advanced packaging capabilities of US semiconductors and filling the gaps in the semiconductor industry chain.
Advanced packaging capabilities are key to manufacturing the most advanced semiconductors and are crucial for the United States to create a prosperous semiconductor ecosystem, ensure the stability of the semiconductor supply chain, and maintain a leading position in the semiconductor field. The CHIPS and Science Act of 2022 authorized the US Department of Commerce to implement the "CHIPS for America" plan with a total budget of up to 50 billion US dollars. A major focus of the plan is to strengthen and enhance the United States' leadership in semiconductor research and development, that is, to invest 11 billion US dollars in four R&D projects - the National Semiconductor Technology Center (NSTC), NAPMP, three new manufacturing institutes, and metrology R&D projects, to create a dynamic innovation network for the US semiconductor ecosystem.
The NAPMP plan is an important part of the US Department of Commerce's 11 billion US dollar investment, mainly supporting the construction of the US advanced packaging ecosystem in the following ways: establishing advanced packaging pilot facilities, accelerating innovation and technology transfer in packaging, equipment, and processes; promoting the development of digital tools to reduce the time and cost required for advanced packaging engineering; supporting and promoting cooperation between the industry, academia, training institutions, and the government to jointly cultivate the workforce in the field of advanced packaging.
Specifically, the NAPMAP plan will prioritize investment in the following six areas: (1) materials and substrates; (2) equipment, tools, and processes; (3) power delivery and thermal management; (4) photonics and connectors; (5) chiplet ecosystem; (6) collaborative design of testing, repair, security, interoperability, and reliability. NAPMAP is expected to announce the first round of funding opportunities in early 2024, mainly funding R&D in the field of materials and substrates.
Under the incentive of the US chip act, several companies have planned to implement packaging projects in the United States.
Previously, South Korean chip maker SK Hynix has stated that it will invest 15 billion US dollars to establish an advanced packaging facility in the United States.
Arizona Governor Katie Hobbs also revealed that the state is negotiating with TSMC, which may build an advanced packaging plant in the state.The Greater Phoenix Economic Council's CEO, Chris Camacho, previously stated that Arizona is in the "mid-stage" of negotiations with multiple global packaging companies, testing, and quality assurance companies, with the expectation that several companies could break ground by 2024.
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