U.S. Secures $1.5B CHIPS Act Deals With Amkor and SKhynix for Chip Packaging Facilities

In recent developments under the CHIPS & Science Act, the U.S. government has allocated substantial funds, reaching into the tens of billions, to industry leaders like Intel, Samsung, and TSMC. This move aims to boost the nation’s semiconductor production over the next few years. However, a major part of the process, the testing, assembly, and packaging of these chips, predominantly takes place in Asia, leaving a gap in the U.S. supply chain. To address this, the U.S. has recently inked memorandums of understanding worth approximately $1.5 billion with companies Amkor and SK hynix. This initiative supports their plans to set up chip packaging facilities on U.S. soil.

Amkor’s High-Tech Facility with a Focus on Apple

Amkor is gearing up to construct an advanced packaging plant with an investment of $2 billion in Peoria, Arizona. This facility will handle chips produced by TSMC at their Fab 21 site near Phoenix. The MOU grants Amkor $400 million in direct funding alongside a $200 million loan opportunity under the CHIPS & Science Act. Plus, the company can benefit from a 25% investment tax credit on eligible capital expenditures.

Strategically located near TSMC’s soon-to-be Fab 21 complex, Amkor’s new facility will cover 55 acres. Once finished, it will offer over 500,000 square feet of cleanroom space—more than doubling the size of their site in Vietnam. Although specific details about the facility’s capacity and technologies remain under wraps, it’s expected to serve various sectors, such as automotive, high-performance computing, and mobile tech. This means it will likely provide an array of packaging solutions, including traditional, 2.5D, and 3D technologies.

In a significant collaboration, Amkor has worked closely with Apple during the planning stages of the Peoria site, setting Apple up to be the facility’s primary customer. This partnership underscores the facility’s crucial role in strengthening the U.S. semiconductor supply chain and Amkor’s position as a pivotal ally for companies relying on TSMC’s output. This project is poised to create around 2,000 jobs and aims to start operations by 2027.

SK hynix Eyes U.S. for HBM4 Production

Meanwhile, SK hynix has also entered into a preliminary deal with the U.S. government to gain up to $450 million in funding and $500 million in loans. Their goal? To establish an advanced memory packaging facility in West Lafayette, Indiana.

Slated to start operations in 2028, this facility will focus on packaging HBM4 or HBM4E memory. Although the actual production of DRAM devices for high-bandwidth memory stacks will continue in South Korea, assembling the finished HBM4/HBM4E in the U.S. and potentially integrating these memory modules with top-tier processors represents a major advancement.

Moreover, SK hynix is set to partner with Purdue University and other regional research entities to push the envelope in semiconductor technology and packaging innovations. This collaboration aims to amplify research and development efforts locally, turning the facility into a center for AI technology and providing skilled employment opportunities.

Sources: Amkor, SK hynix