Amkor Breaks Ground on $7 Billion Arizona Project Amid US Chipmaking Rebound

Commentary

Arizona-based Amkor Technology broke ground last week on a $7 billion semiconductor packaging facility near Phoenix that will support customers including Apple and Nvidia, as the United States continues to ramp up efforts to revitalize its chip manufacturing industry.

In tandem with the groundbreaking on Oct. 6, the company announced that planned investment in the state-of-the-art campus in Peoria, Arizona, would increase to $7 billion from $5 billion across two phases. The facility will provide advanced packaging and testing, the final steps in the semiconductor manufacturing process in which disc-shaped silicon wafers are turned into finished microchips.

The campus is slated to be completed in mid-2027, with production expected to start in early 2028. The site will feature more than 750,000 square feet of cleanroom space and will generate up to 3,000 jobs in engineering, operations, and advanced manufacturing, the City of Peoria noted in a statement.

Amkor’s new facility is among a wave of semiconductor projects benefiting from government subsidies and incentives to shore up domestic chip manufacturing, including the Department of Commerce’s CHIPS for America program, which provides $52 billion in funding for the industry. The project is also supported by the Advanced Manufacturing Investment Tax Credit and state and local government incentives.

Companies in the semiconductor ecosystem announced more than $600 billion in private investments in the United States from 2020 through July 2025, according to the Semiconductor Industry Association. The investments consist of 130 projects across 28 states, which are estimated to create 69,000 facility jobs and 122,000 construction jobs.

“President Trump’s leadership is bringing all stages of semiconductor manufacturing back to the United States,” Commerce Secretary Howard Lutnick said in Amkor’s announcement. “Our partnership with Amkor will bring high volume advanced packaging to the U.S. for the first time, supporting our leading AI industry capabilities and American innovation.”

Arizona has emerged as a leader in America’s chip industry revival, with Amkor’s project adding to more than $210 billion in semiconductor projects completed or planned in the state. The Phoenix area hosts more than 75 semiconductor companies, according to industry association SEMI Americas, including Intel Corp. and Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest contract chipmaker.

Amkor first announced plans for the campus in November 2023. The new facility will complement the activities of TSMC’s massive manufacturing complex located nearby, forming another link in the intricate semiconductor supply chain. Sabih Khan, Apple’s chief operating officer, said Amkor’s new facility will package and test the silicon produced for Apple at TSMC Arizona.

TSMC’s first fabrication plant (fab) in Arizona successfully entered high-volume production in the fourth quarter of 2024, using advanced 4-nanometer process technology. The company has also finished construction of a second fab using 3-nanometer technology, according to TSMC’s second-quarter earnings call.

The Taiwanese company stated that it’s working on speeding up production at its Arizona facility by several quarters, prompted by strong interest from leading U.S. customers. TSMC announced in March that it would boost its planned investments in U.S. manufacturing by $100 billion to a total of $165 billion.

Although microchips were invented in the United States, U.S.-located fabs account for only 12 percent of global semiconductor manufacturing today, down from 37 percent in 1990, according to the Semiconductor Industry Association. Rebooting America’s flagging semiconductor industry has become a strategic priority for the federal government under successive administrations.

The first Trump administration worked to bring TSMC to Arizona in 2020 and presented legislation that eventually became the CHIPS and Science Act. The landmark bill, which authorizes the CHIPS for America funding, was signed into law in 2022 by President Joe Biden with bipartisan support.

In his second term of office, Trump has criticized the CHIPS Act while encouraging investment in the semiconductor sector and threatening steep tariffs on imported chips. He has also sought to intervene directly in the industry, for example, by striking a deal with Intel in August that gives the federal government a 10 percent ownership stake in the company.

The White House has claimed victory for a series of major investments in the industry, including a plan by Nvidia, the world’s most valuable semiconductor company, to invest hundreds of billions of dollars in its U.S. manufacturing operations over four years. Semiconductor memory firm Micron Technology is boosting its total planned U.S. investment to about $200 billion, including manufacturing and research and development, the Commerce Department announced in June.

The administration’s focus on chipmaking is part of a broader push to strengthen American manufacturing and move critical supply chains closer to the United States. Economic as well as geopolitical calculations underpin these efforts. Semiconductors are the “brains” of modern technology, from consumer electronics to military systems, so America’s dependence on foreign chipmakers is increasingly seen as a major vulnerability.

China claims sovereignty over Taiwan, which makes approximately 92 percent of the world’s advanced chips. A 2024 report by Rice University’s Baker Institute for Public Policy argued that a semiconductor supply disruption triggered by a coercive takeover of the island by China could lead to the largest economic contraction in the past 120 years.

Lutnick suggested in late September that semiconductor production should be split “50-50” between the United States and Taiwan.

“My objective, and this administration’s objective, is to get chip manufacturing significantly onshored—we need to make our own chips,” he said.

Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.