Chipmaker TSMC has signed a Memorandum of Understanding (MoU) with US semiconductor product packaging and test services company, Amkor Technology.

Under the terms of the agreement, Amkor will provide TSMC with turnkey advanced packaging and test services at its planned outsourced semiconductor assembly and test company (OSAT) plant in Peoria, Arizona.

Arizona flag
– Getty Images

TSMC is building three fabs in Phoenix, Arizona, two of which will produce 4nm and 3nm semiconductors, and a third will manufacture 2nm chips.

In a statement, the two companies said “the close collaboration and proximity of TSMC’s front-end fab and Amkor’s back-end facility will accelerate overall product cycle times,” adding that they will “jointly define the specific packaging technologies” used to address common customer needs.

"Amkor is proud to collaborate with TSMC to provide seamless integration of silicon manufacturing and packaging processes through an efficient turnkey advanced packaging and test business model in the United States,” said Giel Rutten, Amkor’s president and CEO. “This expanded partnership underscores our commitment to driving innovation and advancing semiconductor technology while ensuring resilient supply chains."

“Our customers are increasingly depending on advanced packaging technologies for their breakthroughs in advanced mobile applications, artificial intelligence, and high-performance computing, and TSMC is pleased to work side by side with a trusted longtime strategic partner in Amkor to support them with a more diverse manufacturing footprint,” added Dr. Kevin Zhang, TSMC’s SVP of business development and global sales, and deputy joint COO. “We look forward to close collaboration with Amkor at their Peoria facility to maximize the value of our fabs in Phoenix and provide more comprehensive services to our customers in the United States.”

Both TSMC and Amkor have been awarded funding from the US government under the CHIPS and Science Act to support the construction of their Arizona plants.

In April, the US Department of Commerce announced it would be awarding TSMC a funding package of $11.6 billion, consisting of $6.6bn in grants and an additional $5bn in loans. The company has plans to invest a total of $65bn in the state, with the project expected to create approximately 6,000 direct manufacturing jobs, more than 20,000 construction jobs, and tens of thousands of indirect jobs.

Amkor is similarly set to receive up to $400 million in direct funding and $200m in loans from the CHIPS Act, to support the company’s $2bn investment in the proposed OSAT plant. The facility would be the largest of its type in the US and would create 2,000 jobs.

In November 2023, Apple signed a deal with Amkor to package its Apple Silicon at the Peoria facility, which TSMC will produce at its nearby Phoenix fab. As a result of the deal, Apple became the “first and largest” customer at Amkor’s new plant.