Amkor to build $2 billion semiconductor testing plant in Peoria. 2,000 jobs promised (2024)

Amkor to build $2 billion semiconductor testing plant in Peoria. 2,000 jobs promised (1)

Amkor Technology Inc., a leading provider of semiconductor packaging and testing services, said it plans to build an advanced facility in Peoria that could cost $2 billion, bring roughly 2,000 jobs and partner with another major chipmaking complex in the northwest Valley.

Tempe-based Amkor said it will package and test chips produced for Apple Inc. at the nearby Taiwan Semiconductor Manufacturing Co. complex near Dove Valley Road and 43rd Avenue.

Amkorsaid it has secured roughly 55 acres of land with the intent of building a state-of-the-art manufacturing campus with more than 500,000 square feet of clean room space. The first phase of the manufacturing plant is targeted to be ready for production within the next two to three years.

"Groundbreaking is anticipated in the second half of 2024 with a target to begin production within two to three years," said Christina Parsons, an Amkor spokeswoman, in an email. She didn't specify the location but said the site was chosen based on factors including "available infrastructure, ability to increase scale on the site (and) increasing population and workforce in the West Valley."

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Focus on semiconductor packaging

Amkor ranks as one of Arizona's larger public corporations with a stock market worth or capitalization of $7 billion. The company employed more than 31,000 people at the end of 2022, though almost exclusively in Asia in countries including South Korea, China, Japan and Taiwan. The company currently counts about 400 employees in Arizona.

Amkor's two largest customers are Apple and Qualcomm. Apple accounted for 20.6% and Qualcomm 10.1%. of Amkor's $7.1 billion in revenue last year.

Amkor’s investment will help to broaden the global supply chain for the packaging or encasing of semiconductors into the many devices that they power, the company said.

Advanced packaging creates more efficient devices capable of processing large amounts of data quickly and in a power-efficient way. Packaging complements semiconductor manufacturing but has been largely overlooked until recent years, according to industry sources.

“Advanced packaging is helping to meet the demand for semiconductors that run emerging applications now going mainstream — for example, 5G, autonomous vehicles and other Internet of Things technologies, and virtual and augmented reality,” said researcher McKinsey in a report. “These applications require high-performance, low-power chips that can rapidly process massive quantities of data.”

If semiconductors are the brains of modern electronic devices, the packaging would be the nervous system and skeleton, according to a description by electronics giant Samsung. Packaging connects semiconductors in a device, supplies electricity, helps to protect the chips and more.

Amkor describes itself as the only outsourced semiconductor assembly and testing company headquartered in the U.S. with advanced technology and high-volume manufacturing experience. Upon completion, the Peoria complex will be the largest such complex in the U.S. and will help broaden the geographic footprint of the industry, Amkor said.

"Expansion of a U.S. semiconductor supply chain is underway,” said Giel Rutten, Amkor’s president and CEO, in a statement. “As the largest U.S.-headquartered advanced-packaging company, we are excited to lead the charge in bolstering America’s advanced packaging capabilities.”

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Connection to CHIPS Act

Arizona Senator Mark Kelly, a supporter and chief negotiator of the CHIPS and Science Act, hailed the announcement as one of the largest microchip investments for Arizona since the legislation was passed last year.

“This is a huge step forward to reducing dependence on other countries in the microchip supply chain,” Kelly said in a statement. “When negotiating the CHIPS and Science Act, one of my top priorities was making sure companies like Amkor had the support needed to develop a resilient supply chain in places like Arizona that are leading the way in bringing microchip manufacturing back to America.”

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Rutten said the semiconductor industry understands the need to broaden its geographic footprint. The company intends to "help our customers ensure resilient supply chains and be a part of a strong American semiconductor ecosystem.” The company's products are used in computing, automotive, communications and other industries.

Amkor, which was founded in South Korea in 1968 andwhich established a presence in the Phoenix area in 1984, said its new facility will position thecompany among a growing array of semiconductor manufacturers, suppliers and others with large operations here, including TSMC, Intel, Applied Materials and ASML.

Amkorsaid it has applied for federal funding under the CHIPS and Science Act, which was enacted to boost American competitiveness, innovation and national security in the semiconductor industry. As part of the$52.7 billionprogram, the federal government will award$39 billionto U.S. companies in competitive grants to manufacturers to finance construction, expansion and modernization of facilities and equipment, Amkor said, calling the funding critical to its Peoria project.

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Reaction to Peoria announcement

The Amkor announcement elicited enthusiastic responses in Arizona and beyond.

Kelly called the announcement “a huge step forward to reducing dependence on other countries in the microchip supply chain.”

Arizona Gov. Katie Hobbs said the project “will solidify (the state) as a world leader in the semiconductor industry,” and she pledged to work to “continue to expand the semiconductor ecosystem and continue Arizona’s long history of leadership in the advanced manufacturing sector.”

Dr. C.C. Wei, TSMC’s CEO, said Amkor has been an important partner with the Taiwan-based company for many years.

“TSMC applaudsAmkorfor investing in the future of the semiconductor industry with us inArizona,” he said in a statement. “ We share Amkor’s excitement for its significant investment and the value this facility will bring to TSMC, our customers and the ecosystem.”

Jeff Williams, Apple’s chief operating officer, said the computer and cellphone giant has worked with Amkor for more than a decade packaging chips used extensively in all Apple products.

Reach the writer at russ.wiles@arizonarepublic.com.

Amkor to build $2 billion semiconductor testing plant in Peoria. 2,000 jobs promised (2024)

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