This article is compiled by Semiconductor Industry (ID: ICVIEWS)

The number of projects to build advanced packaging factories in the United States is increasing.

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 assembly and test facility in Peoria, Arizona. The facility will cost $2 billion and will be located near TSMC's upcoming Fab 21 complex in Arizona to support customers who manufacture chips there.

Amkor’s new facility near Peoria, Arizona, will be the largest of its kind in the U.S. 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 out and equipped. To give a sense of scale, this cleanroom area will be more than twice the cleanroom space at Amkor’s advanced chip packaging facility in Vietnam.

Amkor didn’t reveal the capacity of the upcoming campus or which technologies it will support (which would qualify as Apple’s), but said the new packaging facility will serve automotive, high-performance computing, and mobile applications, so it’s reasonable to expect it to offer a wide range of traditional, 2.5D, and 3D packaging technologies and services.

The initial construction phase of the Peoria, Arizona facility is expected to be three years, with operations expected in 2027. The OSAT facility is adjacent to Intel Foundry and TSMC's wafer fabs in Arizona, and chip design companies using the aforementioned foundry services will be able to package their chips in the state. Essentially, Amkor's facility enables a strong domestic semiconductor supply chain and positions Amkor as a key partner for fabless chip design companies and foundries.

In fact, Amkor and TSMC have a close working relationship and collaborate to meet the needs of their common customers in Taiwan. This collaboration is expected to ensure seamless connectivity of technology across the global manufacturing network, so companies such as Apple and Nvidia can produce and package the same chips in Taiwan and the United States. At the same time, given the timelines of TSMC's Fab 21 (first phase online in 2025) and Amkor Arizona (to begin operations in 2027), the first chips packaged in 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 for the Peoria facility, which will package and test chips for Apple manufactured at a nearby TSMC facility. Upon opening, Apple will become the facility’s first and largest customer. Apple has publicly endorsed Amkor’s packaging facility in Arizona and has said it will use the services of TSMC and Amkor in Arizona to manufacture and package its chips. Given the company’s typically tight-lipped attitude, the commitment to TSMC and Amkor is a major move, likely intended to convince the U.S. government to fund the projects.

The facility will require a $2 billion investment and will create approximately 2,000 jobs. The agreement with the U.S. Department of Commerce outlines potential funding, including $400 million in direct financial support and a $200 million loan under the Chips and Science Act. In addition, Amkor plans to benefit from investment tax credits covering up to 25% of its eligible capital expenditures.

US chip bill provides $3 billion in funding for advanced packaging

In November 2023, the U.S. government launched the National Advanced Packaging and Manufacturing Program (NAPMP) with a total investment of approximately US$3 billion. This is the first major R&D investment plan released by the 2022 Chips and Science Act, which aims to improve the advanced packaging capabilities of U.S. semiconductors and make up for the shortcomings of its semiconductor industry chain.

Advanced packaging capabilities are key to manufacturing the most advanced semiconductors, and are essential for the United States to create a prosperous semiconductor ecosystem, ensure the stability of the semiconductor supply chain, and maintain its leading position in the semiconductor field. The Chips and Science Act of 2022 authorizes the U.S. Department of Commerce to implement the "CHIPS for America" ​​program with a total funding of up to $50 billion. A major focus of the program is to strengthen and enhance the United States' R&D leadership in the semiconductor field, that is, to invest $11 billion to implement 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 U.S. semiconductor ecosystem.

The NAPMP program is an important part of the U.S. Department of Commerce's $11 billion investment, which supports the construction of the U.S. advanced packaging ecosystem through the following means: establishing advanced packaging pilot facilities to accelerate innovation and technology transfer in packaging, equipment and processes; promoting the development of digital tools to reduce the time and cost of advanced packaging projects; supporting and promoting the establishment of cooperative relationships between industry, academia, training institutions and the government to jointly cultivate a workforce in the field of advanced packaging.

Specifically, the NAPMAP program will prioritize investments 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; and (6) Co-design for testing, repair, security, interoperability, and reliability. NAPMAP is expected to announce the first round of funding opportunities in early 2024, primarily to fund research and development in the materials and substrates areas.

Inspired by the US CHIP Act, many companies have planned to implement packaging projects in the United States.

Previously, South Korean chipmaker SK Hynix said it would invest $15 billion to build advanced packaging facilities in the United States.

Arizona Governor Katie Hobbs also revealed that the state is in talks with TSMC to possibly build an advanced packaging plant in the state.

Chris Camacho, CEO of the Greater Phoenix Economic Council, previously said Arizona is in the "mid-stage" of negotiations with several global packaging, testing and quality assurance companies, and expects several companies to break ground in 2024.

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