Chandler's Amkor Technology nabs $600M in federal funding for huge Peoria plant

Amkor Technology, which earlier this year announced a major expansion in Peoria, has qualified for up to $600 million in preliminary federal funding to complete the project and operate it.

The U.S. Department of Commerce said the Chandler-based semiconductor-services company has received tentative approval for up to $400 million in grants under the federal CHIPS and Science Act and up to $200 million in federal loans on favorable terms.

Amkor, which tests and packages semiconductors made by other companies, expects to start construction in Peoria around the middle of next year on the facility and begin production in 2027, said Mike Schmidt, director of the U.S. Commerce Department's CHIPS Program Office.

The project will create around 1,000 permanent jobs and roughly the same number of construction positions, he said.

More funding for Arizona companies

The grants and loans for Amkor follow even larger CHIPS funding announcements for Intel Corp. in Chandler and Taiwan Semiconductor Manufacturing Co. for a complex it is building in north Phoenix , as well as funding for Chandler-based Microchip Technology for operations in other states.

Corporations that are headquartered or operating in Arizona have been near the forefront for funding under the CHIPS Act, which aims to revitalize U.S. manufacturing and expand supply chains for the critical semiconductor industry and its products, which are found in an array of electronic devices and systems including smartphones, computers, data centers, cars, medical devices, military weapons, electric-power components and more.

The legislation was a major theme of the Biden administration but also has received bipartisan support.

“Arizona certainly is emerging as a hugely important market ecosystem for semiconductor manufacturing in the U.S.,” Schmidt told The Arizona Republic. The Amkor funding announcement is an investment that “really demonstrates the potential of the CHIPS Act,” he said.

Key step in semiconductor pipeline

Amkor tests semiconductors manufactured by others and packages them. Packaging involves protecting or enclosing semiconductors and other components and finalizing their electrical connections.

“Right now, a very significant share of (semiconductor) production is packaged overseas,” mainly in East Asian nations, Schmidt said.

Part of the thrust behind the CHIPS Act is to perform testing and packaging activities for advanced semiconductors in the U.S., strengthening and improving supply chains, partly out of national security concerns. The Amkor project along with one in Texas are the main testing/packaging recipients so far under the act, Schmidt said.

He predicted Amkor would test and package semiconductors made at TSMC’s fabs or factories in north Phoenix, along with those made by Global Foundries in New York. Many of these and other chips will go into Apple products.

The Amkor CHIPS Act funding could be finalized within several months, he said.

Focus on advanced applications

Amkor’s complex in Peoria will support semiconductors used in high-performance computing and artificial intelligence as well as applications in communications, the automotive industry and other markets. Advanced packaging is an area where semiconductors can be improved further, from both an efficiency and power-reduction standpoint, Schmidt said.

“One of the fundamental goals of the CHIPS and Science Act is creating an advanced packaging ecosystem in the U.S. to ensure full start-to-finish chip production occurs domestically,” Commerce Secretary Gina Raimondo said, in a prepared statement. “Advanced packaging drives chip innovation at all levels.”

Giel Rutten, Amkor’s president and CEO, issued a statement underscoring the company’s “commitment to grow America’s domestic semiconductor ecosystem” and calling advanced packaging “an essential component of semiconductor innovation and manufacturing.”

When fully operational, the Commerce Department said, Amkor would package and test millions of leading-edge chips serving autonomous vehicles, 5G/6G smartphones,  large-scale data centers and other applications.

Metro Phoenix also has become a national leader in data centers .

Reach the reporter at russ.wiles@arizonarepublic.com .

This article originally appeared on Arizona Republic: Chandler's Amkor Technology nabs $600M in federal funding for huge Peoria plant