TSMC and Amkor link up to bring advanced packaging stateside

Arizona looks like the place to be for US semiconductor manufacturing

Taiwan's TSMC has inked a deal with US semiconductor outfit Amkor Technology to beef up advanced chip packaging on American soil.

The Memorandum of Understanding marks another step in bolstering the US chip supply chain and the country's standing in the global market – a key objective supported by the CHIPS Act.

Amkor provides outsourced semiconductor assembly and test services, specializing in advanced technologies such as fan-out wafer level packaging (inFO) and 3D packaging techniques like chip-on-wafer-on-substrate (CoWoS).

The advanced packaging facility is set to be built in Peoria, Arizona. Notably, fan-out wafer packaging, a technology used by companies like Apple to connect memory to processors in iPhones and MacBooks, will be a focal point at the site.

Amkor's decision to establish the advanced packaging facility near TSMC's Phoenix plant is designed to also with logistical and operational factors in mind.

The alliance represents a shift for the US, which has long relied on overseas operations for advanced stages of chip production. Countries like Taiwan and South Korea have historically dominated this space, offering much of the world's advanced packaging and testing capacity, which is essential for combining multiple silicon dies into single packages.

Establishing this latest facility in the US helps to build a vital part of the nation's semiconductor manufacturing process, reducing America's dependency on foreign production. This shift also mitigates risks associated with geopolitical tensions in East Asia. Currently, only a few companies, such as Intel, Amkor, and Texas Instruments, offer advanced packaging capabilities within the US.

Traditionally, the US has focused on front-end chip design and manufacturing, while much of the back-end processes – packaging and testing – were outsourced to Asia. Advanced packaging, which integrates multiple chips into a single module, is becoming increasingly important as it pushes chip performance beyond the limitations of traditional transistor scaling. Products like AMD's Ryzen processors and Intel's Meteor Lake SoC rely on these multi-chip packaging techniques.

While Taiwan remains a dominant force in the industry, this development with TSMC and Amkor aligns with the CHIPS Act's goals of bolstering US semiconductor infrastructure. The $52 billion legislative package is designed to incentivize chipmakers to build and expand within the US, boosting local production capacity.

TSMC's earlier commitment to a $40 billion chip fabrication plant in Phoenix, Arizona, laid the foundation for this deal with Amkor. ®