The U.S. government’s CHIPS & Science Act has injected substantial support, with billions in grants and loans, into major chip manufacturers like Intel, Samsung, and TSMC. This initiative aims to bolster America’s semiconductor production capacity over the upcoming years. Although the U.S. is ramping up production, the testing, assembly, and packaging of most chips still happen in Asia, leaving a crucial gap in the domestic supply chain. To bridge this gap, the U.S. government recently signed agreements worth approximately $1.5 billion with companies Amkor and SK hynix. This move is designed to encourage them to set up chip packaging facilities within the United States.
Amkor’s Ambitious Plans Tied to Apple
Amkor is setting its sights on building a state-of-the-art $2 billion facility near Peoria, Arizona. This site will focus on testing and assembling chips from TSMC’s Fab 21, located nearby in Phoenix. Under a memorandum of understanding, Amkor will receive $400 million in direct funds along with $200 million in loans thanks to the CHIPS & Science Act. Additionally, they plan to benefit from a 25% investment tax credit applicable to eligible capital expenses.
Strategically positioned near TSMC’s expansive Fab 21, Amkor’s future Peoria facility will cover 55 acres and boast over 500,000 square feet of cleanroom space—exceeding twice the size of their Vietnam site. While specifics on capacity and technologies remain under wraps, it’s anticipated to serve industries from automotive to high-performance computing and mobile tech, offering diverse packaging solutions like traditional, 2.5D, and 3D technologies.
In a significant collaboration, Amkor has teamed up with Apple to lay the groundwork for this facility, with Apple poised to be its primary client. This collaboration underlines the facility’s pivotal role in strengthening the U.S. semiconductor supply chain and establishing Amkor as a crucial partner for firms leveraging TSMC’s output. The project is expected to create about 2,000 jobs with operations anticipated to commence in 2027.
SK hynix Expands Memory Packaging to Indiana
SK hynix, not wanting to be left behind, has entered into an agreement with the U.S. government, securing up to $450 million in direct funding and $500 million in loans to develop an advanced memory packaging plant in West Lafayette, Indiana.
Slated to be operational by 2028, this facility will focus on assembling HBM4 or potentially HBM4E memory. While the DRAM components for high bandwidth memory will continue production in South Korea, final packaging and potential integration with high-end processors in the U.S. mark a significant strategic move.
Beyond setting up the packaging plant, SK hynix plans to work closely with Purdue University and other local research bodies to push the boundaries of semiconductor technology. This collaboration aims to enhance research and development efforts within the region, marking the facility as a centerpiece for AI advancements and employment opportunities.
Sources: Amkor, SK hynix
