July 29, 2024 /SemiMedia/ -- According to Bloomberg, Amkor Technology, one of the world's largest outsourced semiconductor assembly and test (OSAT) suppliers, has signed a preliminary agreement with the U.S. government to receive funding for its new advanced chip assembly and test plant in Peoria, Arizona.

Located near Peoria, Arizona, Amkor’s new facility is its first domestic packaging facility and will be the largest of its kind in the U.S. The company has reserved 55 acres of land for the facility, which, when completed and fully equipped, will include more than 500,000 square feet (46,451 square meters) of cleanroom space, more than double the cleanroom area of Amkor’s advanced chip packaging facility in Vietnam.

Amkor did not disclose the capacity of the upcoming facility or which technologies it will support, but said the new packaging facility will serve automotive, high-performance computing and mobile applications. The industry expects it to offer a wide range of traditional, 2.5D and 3D packaging technologies.

The new facility is adjacent to Intel's foundry and TSMC's plants in Arizona, allowing chip designers who use the aforementioned contract chipmakers to package chips in the state. The initial phase of the plant is expected to be operational within three years.

Amkor’s new facility enables a strong domestic semiconductor supply chain and positions Amkor as a key partner to fabless chip designers and foundries.

The plant will require a $2 billion investment and will create approximately 2,000 jobs. The agreement with the U.S. Department of Commerce outlines potential funding, including up to $400 million in direct financial support and a $200 million loan under the Chips and Science Act. In addition, Amkor plans to receive an investment tax credit covering up to 25% of its qualifying capital expenditures.