US to award Amkor up to $400 million for chip packaging plant

By David Shepardson

(Reuters) - The U.S. Commerce Department said on Friday it plans to award Amkor Technology up to $400 million in government grants to help fund the company's planned $2 billion advanced semiconductor packaging facility in Arizona.

The plant is set to be the largest of its kind in the U.S. and when fully operational will package and test millions of chips for autonomous vehicles, 5G/6G and data centers.

Apple will be its first and biggest customer with the chips produced at a nearby Taiwanese chipmaker TSMC facility.

Advanced packaging is a high-tech method of placing multiple chips with a variety of functions in a densely interconnected "package."

Commerce Secretary Gina Raimondo said the award would help meet growing demand for AI chips.

The chips Amkor will package "are foundational to technologies of the future that will define global economic and national security for decades to come," she added.

The department also plans to make available $200 million in government loans for the Amkor project, which is expected to qualify for a 25% investment tax credit.

The Commerce Department said last year it planned to spend $3 billion on advanced packaging. Congress in 2022 approved a $39-billion subsidy program for U.S. semiconductor manufacturing and related components.

The latest award, like others from the chips subsidy program, has yet to be finalized and terms could change.

In other awards, TSMC has won $6.6 billion in expected grants after it said it would expand planned investment by $25 billion to $65 billion and add a third Arizona chips fab by 2030.

Semiconductor packaging provider Absolics, part of the SK Group, is also due to gain $75 million. SK Hynix, the world's second-largest memory chip maker, plans to invest nearly $4 billion to build an advanced packaging plant for AI products in Indiana.

(Reporting by David Shepardson; Editing by Edwina Gibbs)