Recently, Amkor Technology, Inc. and TSMC announced plans to expand their partnership with a focus on advanced packaging technologies in Arizona. According to a news report on October 4, 2024, the two companies have signed a memorandum of understanding to collaborate and bring advanced packaging and test capabilities to Arizona, further expanding the region's semiconductor ecosystem.
Through this partnership, TSMC is able to leverage one-stop advanced assembly and test services from Amkor's planned facility in Peoria, Arizona, to support its customers, particularly those using TSMC's advanced wafer fabrication facility in Phoenix. This close collaboration and proximity of TSMC's front-end fab to Amkor's back-end facilities will accelerate the overall cycle time of the product.
Together, the two companies will define the specific packaging technologies that will be employed, such as integrated fan-out (InFO) and wafer-level packaging (CoWoS) for TSMC, to meet the needs of mutual customers. Integrated fan-out technology is an important branch of the semiconductor packaging market, providing a cost-effective and high-performance packaging solution. According to Yole's report, the fan-out packaging market is expected to grow from $2.1 billion in 2021 to $4 billion by 2027, at a CAGR of 11%. InFO technology is particularly well suited for applications in areas such as high-performance computing, mobile devices, and automotive electronics. As these areas continue to grow, so does the demand for advanced packaging technologies such as InFO. Moreover, with the advancement of technology and the reduction of manufacturing costs, the market penetration of InFO packages is expected to increase further. According to TrendForce, the surge in demand for AI chips has led to CoWoS production capacity becoming a significant bottleneck for AI chip production. TSMC plans to double its CoWoS production capacity in 2024 to alleviate the imbalance between supply and demand in the market.
Pictured: Amkor and TSMC expand their partnership
In addition, TSMC plans to further expand its CoWoS production capacity by establishing a new advanced packaging facility at the Causeway Science Park, which is expected to be completed by the end of 2026 and start mass production in the second or third quarter of 2027. This agreement underscores both companies' shared commitment to supporting customers' needs for geographic flexibility in front-end and back-end manufacturing, while also facilitating the development of a vibrant and comprehensive semiconductor manufacturing ecosystem in the United States.
Giel Rutten, President and CEO of Amkor, said, "Amkor is proud to partner with TSMC to enable seamless integration of silicon manufacturing and packaging processes by providing an efficient one-stop advanced packaging and testing business model in the United States. This expanded partnership underscores our commitment to driving innovation and advancing semiconductor technology while ensuring supply chain resilience. ”
"Our customers are increasingly relying on advanced packaging technologies to enable their breakthroughs in advanced mobile applications, artificial intelligence and high-performance computing, and TSMC is excited to work side-by-side with long-term strategic partner Amkor to provide them with a more diverse manufacturing footprint," said Dr. Kevin Zhang, Senior Vice President of Business Development and Global Sales and Deputy Chief Operating Officer at TSMC.”
Amkor plans to build a new state-of-the-art packaging and test facility in Peoria, Arizona, with an expected investment of about $2 billion and about 2,000 people employed at the new facility. This will be the largest outsourced advanced packaging facility in the United States.
The collaboration comes in the context of the United States' government's efforts to rebuild United States semiconductor manufacturing capacity and reduce dependence on foreign production, in line with the goals of the CHIPS Act.
