US Department of Commerce announces 0.4 billion dollar subsidy for Amco, the largest US packaging company, based on the CHIPS Plus Act

The US Department of Commerce announced on 7/26 that it has signed a preliminary memorandum of understanding (PMT) to subsidize Amkor Technology, which is the largest semiconductor assembly/test (OSAT) company based in the United States, with a maximum of 0.4 billion dollars based on CHIPS and the Scientific Act (CHIPS Plus Act). The target of the grant is the construction of an advanced packaging test facility in Peoria, Arizona. The company announced in 2023/11 that it plans to invest 2 billion dollars and hire approximately 2,000 people.

According to the Ministry of Commerce's announcement, packaging and testing of millions of advanced semiconductors for autonomous vehicles, 5G/6G smartphones, large-scale data centers, etc. will be carried out after full-scale operation at Amco's new facility. The company's 2.5-dimensional (D) packaging technology is used in the final process of semiconductor manufacturing for graphics processing units (GPUs) and artificial intelligence (AI), and it is said that it is the foundation for AI and high-performance computing applications.

The Department of Commerce emphasized the significance of building a highly reliable advanced packaging ecosystem within the United States with this grant and supporting the strengthening of the US economy and national security by responding to growing demand for semiconductors for AI. It was also stated that companies that support the world's most advanced technology, such as TSMC (Taiwan Integrated Circuit Manufacturing), Apple, Global Foundry's, etc. (note), will be able to perform all semiconductor manufacturing processes within the United States. Commerce Department Director Gina Remond stated in an announcement that “cutting-edge chips packaged in Arizona will be the foundation of future technology that will determine the global economy and national security for decades to come.”

Packaging classified as a post-process is individual in shape, and since it is necessary to change equipment settings each time, production plants are concentrated in countries with low labor costs, and it is said that it is unprofitable in the United States where production costs are high. Therefore, in order to perform packaging within the United States, it is said that “advanced packaging,” which automates production as much as possible, is necessary. In addition to announcing grants to AMCO this time, the Ministry of Commerce announced in 2024/7 that it would be looking for research and development projects related to advanced packaging.

Furthermore, in addition to the 0.4 billion dollar subsidy, the Ministry of Commerce will lend approximately 0.2 billion dollars to AMCO. Also, Amkor is expected to apply for a 25% investment tax credit.

This is the 15th subsidy under the CHIPS Plus Act, following Taiwan's leading semiconductor manufacturer Global Wafers.

Note: Grants based on the CHIPS Plus Act have also been announced for TSMC and Global Foundry's