Amkor to build IC packaging, testing plant in U.S. to support TSMC

Taipei, Dec. 1 (CNA) Amkor Technology, Inc., the largest IC packaging and testing service provider in the United States, plans to invest US$2 billion to build an advanced plant in Arizona aimed at serving Taiwan Semiconductor Manufacturing Co. (TSMC) and Apple Inc.

In a statement released by Amkor on Thursday, TSMC CEO C.C. Wei (魏哲家), whose company is building two advanced wafer fabs in Arizona, said TSMC and Amkor have become close strategic partners.

"TSMC applauds Amkor for investing in the future of the semiconductor industry with us in Arizona," Wei said. "We share Amkor's excitement for its significant investment and the value this facility will bring to TSMC, our customers, and the ecosystem."

There have been concerns that without the support of an advanced IC packaging and testing facility in the U.S., TSMC would have to send the chips it produces in Arizona back to Taiwan to complete the manufacturing process before shipping finished products back to the U.S. to its American clients.

Amkor, an outsourced semiconductor assembly and test (OSAT) solution provider, said it first established its presence in the Greater Phoenix area in 1984 and is excited to expand its footprint in the evolving Arizona semiconductor industry.

"The new manufacturing location will uniquely position Amkor among a strong ecosystem of front-end fabs, IDMs, and suppliers with current or expanding presence in the area, including TSMC, Intel, Applied Materials, ASML and others," Amkor said.

Amkor's newly planned facility is expected to be the largest outsourced advanced IC packaging and testing facility in the U.S. upon completion, and it should be ready for production within the next two to three years, the company said.

The new facility, to employ about 2,000 people, will provide "high-volume, leading-edge technologies for advanced packaging and testing of semiconductors to support critical markets such as high-performance computing, automotive, and communications," it said.

The first of TSMC's two fabs in Arizona is slated to start mass production in 2025, a year behind schedule due to a lack of skilled construction workers, using the advanced 4 nanometer process.

The second is scheduled to begin commercial production in 2026, using the 3nm process, the latest technology TSMC started mass production at the end of last year. Apple is likely to be the first client of TSMC's chips rolled out in Arizona.

"Apple and Amkor have worked together for more than a decade packaging chips used extensively in all Apple products, and we are thrilled that this partnership will now deliver the largest OSAT advanced packaging facility in the United States," Apple CFO Jeff Williams said in the statement.

Amkor's major rivals include Taiwan's ASE Technology Holding Co. and Powertech Technology Inc. and China's JCET Group Co.

Commenting on the newly announced investment plan by Amkor, ASE, the world's largest IC packaging and testing services provider, reiterated that ASE and TSMC, which has also engaged in the IC packaging and testing business, have forged a close partnership.

ASE did not reveal, however, whether it will follow TSMC's move to the U.S. market to be closer geographically to clients there.

According to market estimates, ASE accounts for about 32 percent of global total OSAT shipments and more than 50 percent of Taiwan's total OSAT shipments.

ASE, Amkor, JCET, TSMC, Intel and Samsung Electronics Co. account for more than 80 percent of the global advanced IC packaging and testing production capacity in the world, an Asian brokerage said in a recent research report.

Amkor has globalized its operations in recent years, with a new facility in Bac Ninh of Vietnam becoming operational in October.