skip to Main Content
Amkor Takes CHIPS Act Reshoring Bait In Arizona

Amkor takes CHIPS Act reshoring bait in Arizona

Amkor takes CHIPS Act reshoring bait in Arizona

Representational image of Amkor’s new OSAT facility in Arizona. Image: Twitter Amkor Technology, the only top-ranked outsourced semiconductor assembly and test (OSAT) service provider headquartered in the United States, has announced plans to build a US$2 billion facility in the state of Arizona. The plan, announced on November 30, will no doubt please US Commerce Secretary Gina Raimondo, who is a strong advocate of building advanced integrated circuit (IC) packaging facilities domestically to reduce US dependence on Asia. Planned in tandem with Apple, which will be Amkor’s first and largest customer, the new facility will assemble, package and test devices made by Taiwan’s TSMC, the world’s largest and most advanced IC foundry which is building its own factories in Arizona. Apple, maker of the iPhone, iPad and iMac computers, is TSMC’s largest customer; Amkor has worked with TSMC for several years. TSMC expects to start operations at its first factory in Arizona in the first half of 2025, while the first phase of Amkor’s new facility should be ready for production in late 2025 or 2026. In addition to smartphones, Amkor plans to serve other segments of the IC market, including high-performance computing and the chip-intensive auto industry. Amkor is the world’s largest OSAT service provider for fabricators of automotive ICs. Amkor has applied for funding under the US CHIPS and Science Act, which provides subsidies to companies that build facilities in the US deemed to contribute to supply chain resilience, technological advance and employment in the semiconductor industry. According to Amkor’s management, the US government subsidy “will be critical to Amkor’s project moving forward.” Amkor expects eventually to employ about 2,000 workers at its Arizona facility. Amkor is promising to create 2,000 new jobs in Arizona. Image: Twitter A delegation led by Arizona Governor Katie Hobbs visited Amkor Korea at the beginning of October. Kate Gallego, the mayor of Phoenix, Arizona, meanwhile, visited in July. The high-profile visits reflect the importance of new industrial investment to Arizona’s economy and the long relationship between the state and Amkor, which dates back to 1984. Market research organization IDC estimates that Amkor had 15.9% of the OSAT market in 2022, ranking second to Taiwan’s ASE’s 27.6%. Amkor was followed by China’s JCET and TFME at 11.3% and 7.1%, respectively, and Taiwan’s PTI at 6.4%. Taiwan had 49%, China 26%, the US 19% and other combined regions 6% of the global OSAT market in 2022. Six of the top 10 OSAT companies are headquartered in Taiwan, three in China and one in the US – Amkor. Together, they control about 80% of the OSAT market. The global OSAT market was valued at about $35 billion in 2022 and is projected to reach $60 billion by the end of the decade, according to Allied Market Research. The semiconductor manufacturing process is divided into a “front end” and a “back end.” In the front-end process, hundreds of chips are fabricated on a wafer made of silicon or other materials. In the back-end process, individual chips are separated by dicing the wafers, assembled by bonding them to a circuit board, packaged by encapsulating them with a protective material and then inspected and tested before shipment. Amkor’s name is a combination of America and Korea. Established as ANAM Industrial in South Korea and Amkor Electronics in the US in 1968, the company began exporting packaged semiconductors “enclosed in metal cans” to the US two years later. These were the first recorded semiconductor exports from South Korea. Amkor Electronics changed its name to Amkor Technology and was listed on NASDAQ (symbol AMKR) in 1998. In 2005, it moved its headquarters from Pennsylvania to Arizona. It now provides IC assembly, packaging and test services for the communications, automotive and industrial, computing and consumer electronics industries. Founder and executive chairman James Kim and his family own 53% of Amkor Technology. Amkor Technology has three factory sites in South Korea, seven in Japan, four in Taiwan, one in China, two in the Philippines, one in Malaysia, one in Vietnam, one in Portugal and one on the drawing board in the US. The company’s R&D center is located in South Korea. On October 11, Amkor held the opening ceremony for its new IC packaging and test facility in Vietnam, which will be the company’s largest when completed. The company is expected to $1.6 billion on the project’s first two phases. Amkor president and CEO Giel Rutten said the new factory “will help Amkor provide an unrivaled geographic footprint to our customers, […]

Click here to view original web page at Amkor takes CHIPS Act reshoring bait in Arizona

Daisie Hobson

Daisie Hobson is a Director at the Reshoring Institute and an engineer with many years of experience in manufacturing and project management.

Leave a Reply

Back To Top