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

With the help of the CHIPS & Science Act, the U.S. government is investing heavily in the semiconductor industry, distributing billions in grants and loans to chip giants like Intel, Samsung, and TSMC. These substantial funds aim to boost America’s semiconductor production over the next few years. Yet, most chips are still being tested, assembled, and packaged in Asia, leaving a noticeable gap in America’s supply chain. To tackle this, the U.S. government recently signed deals worth about $1.5 billion with Amkor and SK hynix to support their plans to construct chip packaging facilities on American soil.

### Amkor’s Ambitious Plans with Apple

Amkor is set to establish a $2 billion advanced packaging plant near Peoria, Arizona. This site will focus on testing and assembling chips produced at TSMC’s Fab 21 in nearby Phoenix. The memorandum of understanding Amkor signed includes $400 million in direct funding and access to $200 million in loans, thanks to the CHIPS & Science Act. Additionally, Amkor intends to benefit from the 25% investment tax credit associated with eligible capital expenses.

Nestled strategically near TSMC’s future Fab 21 site, Amkor’s new facility in Peoria will cover 55 acres and host over 500,000 square feet (around 46,451 square meters) of cleanroom space, doubling the size of its Vietnam site. While specific capacities and the technologies supported by this facility haven’t been disclosed, expectations are high that it will serve a myriad of sectors like automotive, high-performance computing, and mobile. This diverse target suggests the facility will offer a range of packaging solutions, including traditional, 2.5D, and 3D technologies.

Apple has played a significant role in shaping the vision and initial plans for the Peoria facility and is anticipated to be its largest customer from the onset. This collaboration underscores the facility’s importance in solidifying the U.S. semiconductor supply chain and highlights Amkor’s vital role for companies reliant on TSMC’s manufacturing. The facility is expected to create roughly 2,000 jobs and is slated to be operational by 2027.

### SK hynix’s U.S. Venture for HBM4

In a similar vein, SK hynix has reached a preliminary agreement with the U.S. government, which involves up to $450 million in direct funding and $500 million in loans to develop an advanced memory packaging plant in West Lafayette, Indiana.

Targeted to start operations in 2028, this proposed facility will focus on assembling HBM4 or HBM4E memory, while the DRAM devices essential for high-bandwidth memory stacks will continue being manufactured in South Korea. The move to package HBM4/HBM4E in the U.S., and potentially integrate these with high-end processors, marks a significant shift.

Beyond building its packaging plant, SK hynix plans to engage with Purdue University and other local research institutions to push forward semiconductor technology and packaging innovations. This partnership aims to fuel research and development in the area, positioning the facility as a beacon for AI technology and a source of skilled employment.

Overall, these moves by Amkor and SK hynix represent key strides in bolstering America’s role in the global semiconductor supply chain.