Media Contact: Madeline Broas, madeline.broas [at] chips.gov (madeline[dot]broas[at]chips[dot]gov).
Today, the Biden-Harris Administration announced that the U.S. Department of Commerce and Amkor Technology, Inc. have signed a non-binding preliminary memorandum of terms (PMT) to provide up to $400 million in proposed direct funding under the CHIPS and Science Act. President Biden signed the bipartisan CHIPS and Science Act, a key component of his Investing in America agenda, to revitalize semiconductor manufacturing in America while strengthening our domestic supply chain, creating good-paying jobs, and supporting investments in the industries of the future. This proposed funding would support Amkor’s investment of approximately $2 billion in a greenfield project in Peoria, Arizona, which will provide full end-to-end advanced packaging for the world’s most advanced semiconductors for applications in high-performance computing, artificial intelligence, communications, and automotive, end markets.
With this proposed investment in Amkor, the largest U.S.-based outsourced semiconductor assembly and test company (OSAT), the Biden-Harris Administration would help strengthen resilience in key advanced packaging technologies, which will strengthen U.S. economic and national security by ensuring a reliable domestic advanced packaging ecosystem, supporting leading-edge clusters, and helping meet the growing demand for AI chips. Accordingly, companies such as TSMC, Apple, and GlobalFoundries—which power the world’s most advanced technologies—will be able to package and test their essential chips domestically, enabling the full end-to-end cycle of the chip manufacturing process to occur in the United States. As chip design approaches the technical limits of Moore’s Law, which posits that the number of transistors on a semiconductor doubles every two years, advanced packaging is widely believed to be the next frontier of innovation in the industry through its ability to drive enhanced power and performance. Consequently, as a result of proposed CHIPS funding, the U.S. will significantly expand domestic capacity for this critical piece of the semiconductor supply chain, further strengthening U.S. technology leadership.
“One of the fundamental goals of the CHIPS and Science Act is creating an advanced packaging ecosystem in the U.S. to ensure full start to finish chip production occurs domestically. Advanced packaging drives chip innovation at all levels, and because of President Biden’s leadership, the U.S. will have a robust domestic footprint in this critical technology,” said U.S. Secretary of Commerce Gina Raimondo. “The leading-edge chips that will be packaged right here in Arizona are foundational to technologies of the future that will define global economic and national security for decades to come. Thanks to the Biden-Harris Administration, and Amkor’s investments in the U.S., this proposed funding would enhance our supply chain security, create thousands of jobs in Arizona, and further position the United States to out-innovate, out-build, and out-compete the rest of the world.”
“This announcement marks another significant milestone for President Biden and Vice President Harris’s CHIPS & Science Act – dramatically expanding advanced packaging capabilities in the United States” said National Economic Advisor Lael Brainard. “Developing a comprehensive semiconductor ecosystem here in America, from R&D through packaging, will strengthen our technological leadership and create thousands of good paying jobs.”
“The Biden-Harris Administration has committed to making the U.S. a world leader in advanced packaging, which is so critical to the future of the semiconductor industry because it allows us to pack more capability onto every chip,” said Under Secretary of Commerce for Standards and Technology and National Institute of Standards and Technology Director Laurie E. Locascio. “Investments in semiconductors will not succeed without investments in advanced packaging and with this proposed CHIPS funding, Amkor could play a crucial role in the U.S. semiconductor ecosystem.”
“Amkor is proud to be the leading advanced packaging and test OSAT headquartered in the US, and today’s announcement underscores our commitment to grow America’s domestic semiconductor ecosystem,” said Giel Rutten, Amkor’s President and Chief Executive Officer. “Amkor’s Arizona facility will enable us to support the growing semiconductor manufacturing community—while creating 2,000 good jobs—and we look forward to providing our customers with domestic advanced packaging and test capabilities. Advanced packaging is an essential component of semiconductor innovation and manufacturing, and we appreciate our partners at the Department of Commerce for recognizing the importance of this sector as they work to support our industry.”
Developing an advanced packaging ecosystem is one of the four main pillars of CHIPS for America and is necessary to sustain U.S. global competitiveness and achieve supply chain security and resilience, and Amkor is regarded as one of the global leaders in advanced packaging technology. Amkor’s advanced packaging and test facility in Arizona is expected to utilize the most advanced technology such as 2.5D technology and other next generation technologies. The company’s 2.5D technology is foundational for AI and high-performance computing applications as it is the final step in the manufacturing of graphic processing units (“GPUs”) and other AI chips. A lack of 2.5D technology capacity has been a significant chokepoint in the semiconductor industry’s ability to meet the rapidly increasing demand for generative AI products and services.
When fully operational, Amkor will package and test millions of leading-edge chips serving autonomous vehicles, 5G/6G smartphones, and large-scale datacenters across a range of customers. Amkor’s facility in Arizona will support approximately 2,000 jobs. As part of Amkor’s commitment to develop talent locally and across the U.S., they have partnered with Arizona State University, Grand Canyon University, Northern Arizona University, Maricopa Community College, Purdue University, Western Maricopa Education Center. These partnerships build upon the Biden-Harris Administration’s Investing in America Workforce Hub in Phoenix to create pipelines to good jobs.
The company has indicated that it plans to claim the Department of the Treasury’s Investment Tax Credit, which is expected to be up to 25% of qualified capital expenditures. In addition to the proposed direct funding of up to $400 million, the CHIPS Program Office would make approximately $200 million of proposed loans – which is part of the $75 billion in loan authority provided by the CHIPS and Science Act – available to Amkor under the PMT.
As explained in its first Notice of Funding Opportunity, the Department may offer applicants a PMT on a non-binding basis after satisfactory completion of the merit review of a full application. The PMT outlines key terms for a potential CHIPS incentives award, including the amount and form of the award. The award amounts are subject to due diligence and negotiation of award documents and are conditional on the achievement of certain milestones. After the PMT is signed, the Department begins a comprehensive due diligence process on the proposed projects and continues negotiating or refining certain terms with the applicant. The terms contained in any final award documents may differ from the terms of the PMT being announced today.
