U.S. Secures $1.5 Billion CHIPS Act Deals With Amkor and SK hynix for Chip Packaging Facilities

In recent times, the U.S. government, under the CHIPS & Science Act, has injected tens of billions of dollars into grants and loans aimed at bolstering the semiconductor industry. This move is targeted at major chipmakers like Intel, Samsung, and TSMC, with the intention of massively boosting domestic production in the upcoming years. Despite these strides, a critical part of the supply chain – testing, assembling, and packaging – largely happens in Asia, leaving the U.S. supply chain somewhat incomplete. To address this shortfall, the government recently inked agreements worth approximately $1.5 billion with companies like Amkor and SK Hynix. These memorandums of understanding (MOUs) are designed to back their initiatives to set up chip packaging facilities on American soil.

Amkor’s Advanced Packaging Plant with Apple’s Interests

Amkor is gearing up to establish a $2 billion state-of-the-art packaging facility close to Peoria, Arizona. This center will take on the role of testing and assembling chips coming out of TSMC’s Fab 21, located near Phoenix, Arizona. Through an MOU, Amkor has secured $400 million in direct funding and access to $200 million in loans under the CHIPS & Science Act, on top of a 25% tax credit on qualifying capital costs.

The facility, strategically sited near the upcoming TSMC complex, will span 55 acres. Upon completion, it’ll boast over 500,000 square feet of cleanroom space—more than double the size of Amkor’s Vietnam site. While details on its capacity and the technologies it will support remain under wraps, the plant is anticipated to serve multiple domains, such as automotive, high-performance computing, and mobile technology. These suggest a diverse offering of packaging solutions, likely featuring traditional, 2.5D, and 3D capabilities.

In a significant collaboration, Apple has been deeply involved in the planning stages with Amkor and is slated to be its primary, largest customer upon launch. This alliance underscores the facility’s critical role in strengthening the U.S. semiconductor supply chain and positions Amkor as a vital partner for companies leveraging TSMC’s manufacturing prowess. The facility is projected to create around 2,000 jobs and aims to start operations in 2027.

SK hynix’s HBM4 Facility to Come to Indiana

Simultaneously, SK Hynix has penned a preliminary agreement with the U.S. government, securing up to $450 million in direct funding and $500 million in loans to construct an advanced memory packaging plant in West Lafayette, Indiana.

The facility, targeted to commence operations in 2028, is set to assemble HBM4 or HBM4E memory. While the DRAM components for these high-bandwidth modules will continue to roll out from South Korea, assembling and packaging HBM4/HBM4E in the U.S. is a significant advancement. Additionally, the potential integration of these memory modules with high-end processors in America is noteworthy.

Beyond the construction of this packaging plant, SK hynix plans to partner with Purdue University and other regional research bodies to propel semiconductor technology and packaging advancements. This collaboration aims to enhance research and development in the area, positioning the facility as a cornerstone for AI technology growth and creating specialized jobs.

Sources: Amkor, SK hynix