Nov 30, 2023 - News

Amkor announces $2 billion semiconductor facility in Peoria

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Illustration: Aïda Amer/Axios

The Valley's burgeoning semiconductor industry is getting another boost, with Tempe-based Amkor Technology Inc. planning a testing and advanced packaging facility in Peoria.

Driving the news: Amkor on Thursday announced it's acquired a 55-acre property near the incoming Taiwan Semiconductor Manufacturing Co., plant in north Phoenix.

Details: The company plans to build a facility with about 500,000 square feet of "clean room space."

  • It will test and package chips produced at TSMC for Apple — the facility's first and largest customer.
  • Amkor will invest $2 billion in the facility, which it expects will employ about 2,000 people.
  • The first phase of the factory is expected to be completed in two to three years. Amkor said it will be the largest outsourced advanced packaging facility in the U.S.

Why it matters: The facility will help fuel a booming semiconductor industry, anchored in the north Valley by the TSMC plant.

  • Such facilities typically attract related business to the area as well.
  • The industry's U.S. expansion also helps ensure a domestic supply chain that can operate outside Taiwan, which faces the perpetual threat of military aggression from mainland China.
  • Packaging is one of the final steps in the semiconductor manufacturing process, which largely happens outside the country, and the Amkor factory will "help solve a missing piece of the semiconductor chip supply chain and ecosystem in the U.S.," the Phoenix Business Journal reported.

Between the lines: The Amkor facility will be a "crucial addition to Arizona's semiconductor ecosystem" that will help ensure "supply chain resiliency," Arizona Commerce Authority spokesperson Patrick Ptak said in a press statement.

  • There's been little packaging or testing activity in the U.S., another reason this will be a "game changer for Arizona and the nation," he said.

What's next: Peoria and Amkor are finalizing a development agreement the City Council expects to vote on in early 2024.

  • The exact location of the facility and other details won't be disclosed until that's complete, Peoria spokesperson Diane Arthur said.
  • Amkor said it's applied for federal funding from the CHIPS and Science Act, which provides $39 billion in semiconductor manufacturing incentives.

What they're saying: "Semiconductor companies, foundries, and other supply chain partners understand the need to strategically broaden their geographic footprint," said Amkor president and CEO Giel Rutten.

  • Rutten called the new facility "a clear signal of our intent to help our customers ensure resilient supply chains and be a part of a strong American semiconductor ecosystem."
  • Gov. Katie Hobbs described the announcement as "a historic step forward for Arizona that will bolster America's national security and build a more resilient supply chain," while Peoria Mayor Jason Beck touted "the significant capital investment and quality jobs that it brings to our community."

Zoom in: The first phase of the TSMC factory is expected to begin production in the first half of 2025.


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