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Apple's US chip manufacturing pipeline just got a big boost

Amkor's headquarters in Arizona
Amkor's headquarters in Arizona

Apple and manufacturing partner Amkor have announced that a new chip packaging foundry will be built very near the Arizona TSMC foundry, simplifying Apple Silicon production in the US.

Amkor's headquarters in Arizona

Chip packaging is a near-final step to complete chip delivery. A fabricator, like TSMC, will make the initial chips, and the chip packaging process surrounds the silicon chip to both protect it, and allow it to be mounted to a board.

This is not Apple's first partnership with Amkor. The pair have worked together for 12 years, and have partnered again to build the largest advanced chip packaging facility in the US.

Amkor is funding the project to the tune of $2 billion. Ultimately, the facility will employ more than 2000 workers.

"Apple is deeply committed to the future of American manufacturing, and we'll continue to expand our investment here in the United States," said Jeff Williams, Apple's chief operating officer. "Apple silicon has unlocked new levels of performance for our users, enabling them to do things they could never do before, and we are thrilled that Apple silicon will soon be produced and packaged in Arizona."

The Amkor facility will take chips manufactured by the nearby TSMC foundry. Amkor does work for other companies, and it will use the facility to package other chips -- but Apple will be the firm's largest client.

"Expansion of a US semiconductor supply chain is underway, and as the largest US-headquartered advanced packaging company, we are excited to lead the charge in bolstering America's advanced packaging capabilities," said Giel Rutten, Amkor's president and chief executive officer. "Semiconductor companies, foundries, and other supply chain partners understand the need to strategically broaden their geographic footprint. The announcement of our new advanced packaging and test facility in Arizona is a clear signal of our intent to help our customers ensure resilient supply chains and be a part of a strong American semiconductor ecosystem."

Amkor has procured about 55 acres of land, and is planning on building a facility with more than 500,000 square feet of clean room space. The first aspect of construction will start in the next three years.

"Amkor's $2 billion project-- one of the largest microchip investments announced in Arizona since the passage of the CHIPS Act last year-- will create good-paying jobs, strengthen our local economy, and help protect our national security," Arizona Senator Mark Kelly said. "As one of the first advanced packaging facilities in the US, this is a huge step forward to reducing dependence on other countries in the microchip supply chain. 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."

The TSMC plant being made in Arizona has been deemed a political success for the U.S. in regards to global chip production. Even Apple's Tim Cook has hailed the opportunity as "investing in a stronger, brighter future" with chips "proudly stamped Made in America."

Amkor's facility will likely remove the need that TSMC had previously to send fabricated chips back to Taiwan. It was originally thought that the company would have to do the Fan-out Package on Package step elsewhere.

As part of the CHIPS Act, at least $2.5 billion of the $52 billion in chip firm subsidies has been earmarked for a "National Advanced Packaging Manufacturing Program" -- and Amkor's facility likely counts.