Taiwan Semiconductor Manufacturing (NYSE: TSM) and Amkor, a US-based semiconductor packaging company, have signed a 10-year agreement to build a chip packaging hub in Arizona.
Under the deal, Amkor will construct a new facility close to TSMC's existing US manufacturing base in the state. According to MSN's report, the new plant carries a price tag of US$7 billion.
The partnership, also reported by Yahoo Finance and digitimes, focuses on what the industry calls "packaging" — the back-end stage of chip production. After a chip is fabricated on a silicon wafer, packaging is the step that assembles, connects and protects it so it can be installed in phones, computers, cars and data-center hardware. It is an increasingly important part of advanced chipmaking, especially for the high-performance processors used in artificial intelligence.
TSMC is the world's largest contract chipmaker, but until now much of the packaging for chips made at its Arizona fabs has typically been done overseas. Locating an Amkor packaging plant nearby would let more of that work happen on US soil, closing a gap in the domestic supply chain.
The sources do not specify a start date, timeline for completion, or projected job numbers beyond the 10-year term of the agreement.
Why it matters: Building advanced chip packaging in Arizona, next to TSMC's factories, is a step toward making more of the most strategically important technology in the world — cutting-edge semiconductors — fully within the United States.