TSMC Partners with Amkor to Enhance Arizona Chip Packaging Capabilities

Taiwan Semiconductor Manufacturing Company (TSMC) has joined hands with Arizona-based chip packaging and testing service provider Amkor in its efforts to promote the packaging ecosystem at its planned advanced wafer fab house in that US state, according to industry sources.

TSMC’s factory in Arizona, is expected to start commercial production next year and a critical fixture in the US semiconductor supply chain come Q4 2024 Together, the collaboration will cater to the needs of TSMC’s Arizona-based customers by implementing tailored solutions based on TSMC’s Integrated Fan-Out (InFO) and CoWoS packaging technologies.

TSMC Partnering Up with Amkor

With AI taking off, packaging technologies have been thrust into the spotlight even more as noted by the recent silicon window examples showing that increased requirements on advanced GPUs for years to come are beginning to crack existing capabilities. The demand for AI has driven up TSMC stock, leading the corporation to set aside almost $30 billion in capital expenditures across 2025 as well in order to expand the production and packaging capacity of chips. With all that out the way, TSMC is said to have acquired a factory last year, and this may explain its extremely quick start in offering certified packaging originally planned for 2023.

But the bulk of Taiwan Semiconductor Manufacturing Company’s packaging investments are still taking place in Taiwan, with its fab network for actually making chips. Largely, the new Amkor deal expands TSMC’s packaging footprint in the U.S. as both companies want to ramp up wafer bumping and fan-out capabilities with a newly announced Arizona facility being built near an existing Amkor plant.

Arizona has a robust semiconductor supply chain, thanks in part to Intel’s presence there. TSMC’s Arizona fab has attracted additional suppliers, and Taiwan Semiconductor Manufacturing Companyhas received billions in funding from the Biden Administration’s CHIPS and Science Act to develop advanced chip manufacturing facilities in the U.S.

Taiwan Semiconductor Manufacturing Companywill buy chip packaging and testing facilities from Amkor’s new plant in Peoria, Arizona under the agreement The Commerce Department announced in late July that it was awarding $400 million in grants and investing $200 million of its own money into the project., a massive, state-of-the-art plant expected to cost more than $2 billion. It is expected to employ around 2,000 new workers, and TSMC’s involvement speaks to an overall rise in semiconductor fabrication capacity expansion in Arizona, largely boosted by government incentives.

The partnership with Amkor is expected to help TSMC speed up product cycle times as the Arizona fab would be in proximity to Amkor’s Peoria facility. The focus will be on the Taiwanese fab’s InFO and CoWoS chip packaging technologies, with InFO primarily used for smartphone and mobile chip packaging, while CoWoS is preferred for AI GPUs.

This agreement follows recent government decisions that exempt semiconductor facilities from receiving federal subsidies from environmental impact assessments. The semiconductor fabrication process is resource-intensive, necessitating significant chemical usage to maintain high levels of product purity.

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