The $2 billion advanced semiconductor packaging plant that Amkor Technology plans to develop in Arizona will be supported by government funds up to $400 million, according to a statement by the U.S. Commerce Department.
The U.S. Commerce Department announced on Friday that it intends to provide Amkor Technology (AMKR.O.) with government funding worth up to $400 million to support the construction of the $2 billion advanced semiconductor packaging facility the firm proposes to build in Arizona. When fully operational, the plant—which is expected to be the biggest of its kind in the country—will package and test millions of chips for data centers, 5G and 6G networks, and autonomous cars.
Given that the chips are made at TSMC (2330.TW), a nearby Taiwanese chipmaker, Apple (AAPL.O), will be its first and largest customer. A sophisticated technique known as “advanced packaging” combines several chips with different functionalities into a tightly knit “package.” The grant, according to Commerce Secretary Gina Raimondo, will support the rising need for AI technology. Amkor stated that the chips she will be packaging “are foundational to technologies of the future that will define national security and the global economy for decades to come.”
Additionally, the department intends to make $200 million in government financing available for the Amkor project, which is anticipated to be eligible for a 25 percent investment tax credit. The Department of Commerce announced last year that it intended to invest $3 billion in cutting-edge packaging. A $39 billion subsidy program for American semiconductor and related component manufacturing was approved by Congress in 2022. Like previous awards from the chip subsidy program, the terms of this one are still pending.
In further funding, TSMC was granted $6.6 billion after announcing that it will increase the planned investment from $25 billion to $65 billion and establish a third chip manufacturing facility in Arizona by 2030. SK Group (034730.KS) subsidiary Absolics, a supplier of semiconductor packaging, is expected to gain an additional $75 million. In order to construct an advanced packaging line for AI products in Indiana, SK Hynix (000660.KS), the second-largest memory chip manufacturer in the world, intends to invest close to $4 billion.
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