Apple and Amkor to jointly establish a packaging plant - Serving as a downstream US plant for TSMC

Date: 2023-12-10

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News briefing

Apple announced its cooperation project with Amkor on December 1. Amkor plans to invest US$2 billion in this project to establish a new advanced packaging and testing plant in Arizona, USA, which will work to package and test Apple chips produced at TSMC's new Arizona plant.

Impact analysis

Although the US occupies a dominant position in the global semiconductor design field, its manufacturing capabilities are relatively fragile, especially in key segments such as large-scale wafer foundries and backend packaging and testing. To fill the gap in the semiconductor ecosystem, the US has been actively promoting a series of strategic measures, including requirements by the US Department of Commerce of mandatory forwarding of customer information, inventory, and orders for global semiconductor leaders at the end of 2021, and policies such as the implementation of subsidies under the Chips and Science Act in 2022. Such measures have effectively attracted wafer factories such as TSMC, Samsung, and Intel to set up factories in the United States, not only helping increase semiconductor production capacity in the US, but also promoting the development of the semiconductor supply chain. In addition, Amkor has announced its plans to set up a new packaging plant to further plug backend process gaps.

Nevertheless, the US will still need to deal with a series of challenges in the process of strengthening the semiconductor supply, one of which being the shortage of semiconductor professionals in the country. As alerted by the US Semiconductor Industry Association (SIA) in 2023, the semiconductor industry in the US may face a serious talent scarcity by 2030, with the estimated number of worker shortages to reach 67,000. This warning has had an intense impact on the mass production schedule of the 4-nanometer process by TSMC in Arizona, which has been postponed to 2025. Amkor's plant may also take longer to achieve its mass production target. As recently pointed out by the CEO of Nvidia at the DealBook Summit of the New York Times, it will take at least 10 years for the US to establish a complete chip supply chain, again highlighting the long-term challenges the US is facing in the developing semiconductor industry.

It is, therefore, worth noting that as IPC mentioned in November, the scope of legislation under the US Chips and Science Act should not merely be limited to the semiconductor field, but be expanded to the entire electronic manufacturing system to facilitate semiconductor trade, including PCB and substrates. In this context, we cannot overlook the possibility that the US government may officially embrace PCB and substrates as part of the semiconductor ecosystem in the future, and also help introduce Asian suppliers for deployment in the US to cope with such volatile international situations.

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Apple and Amkor to jointly establish a packaging plant - Serving as a downstream US plant for TSMC

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