U.S. Secures $1.5 Billion Deals with Amkor and SKhynix for Chip Packaging Facilities Under CHIPS Act

In a significant move under the CHIPS & Science Act, the U.S. government is injecting billions of dollars into the semiconductor scene with grants and loans aimed at industry giants like Intel, Samsung, and TSMC. This financial boost is set to dramatically enhance America’s chip production capabilities in the years ahead. However, while the U.S. is stepping up its manufacturing game, many chips still undergo testing, assembly, and packaging overseas, mainly in Asia, leaving a critical gap in the domestic supply chain. To remedy this, the U.S. recently sealed deals worth about $1.5 billion with Amkor and SK hynix to foster chip packaging facilities stateside. This strategic move is part of a broader effort to complete the missing puzzle pieces in the nation’s semiconductor production plans.

Amkor’s Ambitious Plans for Arizona

Amkor is making waves with its plan to invest a hefty $2 billion in a cutting-edge chip packaging facility near Peoria, Arizona. The site will handle chips produced by TSMC’s Fab 21, located not too far away in Phoenix. Thanks to a memorandum of understanding, Amkor secures $400 million in direct funding and has the opportunity to tap into $200 million in loans under the CHIPS & Science Act. Additionally, the company plans to leverage a 25% investment tax credit for eligible capital costs.

Located strategically close to TSMC’s Fab 21 in Arizona, Amkor’s upcoming 55-acre site in Peoria will feature over 500,000 square feet of cleanroom space upon completion—more than double the size of its advanced packaging facility in Vietnam. Although Amkor has yet to reveal specifics about capacity or the technologies the facility will support, it’s poised to serve a wide array of sectors, from automotive to high-performance computing and mobile tech. This indicates the new plant will likely offer various packaging options, including traditional, 2.5D, and 3D techniques.

Partnering closely with Apple on this venture, Amkor’s Peoria facility is poised to make Apple its first and largest customer, underscoring a significant commitment from the tech giant. This collaboration highlights the new site’s pivotal role in fortifying the U.S. semiconductor supply chain and positioning Amkor as a quintessential partner for companies utilizing TSMC’s manufacturing prowess. The project is anticipated to create about 2,000 jobs and aims to be operational by 2027.

SK hynix Eyes Indiana for Memory Packaging

Likewise, SK hynix is forging ahead with plans to construct an advanced memory packaging facility in West Lafayette, Indiana. Just this week, they penned a preliminary agreement to access up to $450 million in direct funding and $500 million in loans from the U.S. government.

Slated to kick off operations by 2028, this plant will focus on assembling HBM4 or HBM4E memory. Although DRAM components for high-bandwidth memory stacks will continue to be manufactured in South Korea, assembling the final HBM4/HBM4E products in the U.S. — and potentially coupling these memory modules with top-tier processors — is a game changer.

Beyond just building the plant, SK hynix intends to team up with Purdue University and other local research entities to push forward the boundaries of semiconductor tech and packaging advancements. This collaboration aims to enhance research and development in the area, positioning the new facility as a node for AI technology and driving skilled job creation.

Sources: Amkor, SK hynix