Commerce sends $400 million for Peoria semiconductor testing facility

(The Center Square) – The semiconductor industry in Arizona continues to get boosts, particularly in northwest Maricopa County.

Amkor Technology is expected to get $400 million in federal taxpayer funding and $200 million in loans based on a preliminary contract with the United States Department of Commerce for an “advanced packaging and test” plant. The funding is sourced from the CHIPS and Sciences Act, and the company is expected to put $2 billion into the Arizona plant and create roughly 2,000 jobs, according to a news release .

The release added that they also plan to use the Department of the Treasury’s Investment Tax Credit for 25% of “qualified capital expenditures.”

“Amkor’s Arizona facility will enable us to support the growing semiconductor manufacturing community—while creating 2,000 good jobs—and we look forward to providing our customers with domestic advanced packaging and test capabilities. Advanced packaging is an essential component of semiconductor innovation and manufacturing, and we appreciate our partners at the Department of Commerce for recognizing the importance of this sector as they work to support our industry,” Giel Rutten, Amkor’s president and chief executive officer, said in a statement.

The announcement came as welcomed news to many local leaders.

“This is a big day for the state of Arizona and the entire country. With this award and Amkor’s significant investment, their new facility in Peoria will be one of the first advanced packaging facilities in the United States, marking a critical step in strengthening our microchip supply chain,” Kelly stated.

As the facility will be located in Peoria, Mayor Jason Beck said it is a major development. The region also has a Taiwan Semiconductor Manufacturing Plant under construction, meaning that Peoria and the surrounding north Phoenix area could see an economic windfall from the facilities.

“Peoria is thrilled to celebrate this CHIPS Act commitment to further support Amkor Technology,” Beck said in a statement. “This investment underscores the importance of advanced packaging in the semiconductor industry and reinforces Peoria’s position at the forefront of tech and innovation. This additional funding will further enhance local communities through quality job creation while driving economic development growth for years to come.”

One of the biggest challenges the domestic semiconductor industry is facing as a whole is developing a locally-based skilled workforce. The Center Square previously reported that the Arizona state government, as well as the private sector, is launching apprenticeship efforts in hopes of filling job openings and avoiding more staffing delays.

Besides TSMC and Amkor, Intel and other semiconductor businesses have increased investments in Arizona to make it the hub in the United States for the industry, as it's largely based in Taiwan, which is facing significant tensions with China.