Key Findings
TSMC and Amkor Technology have entered into a landmark 10-year strategic partnership agreement aimed at significantly expanding semiconductor packaging capabilities in Arizona, USA. This long-term contract specifically targets cutting-edge packaging technologies such as TSMC’s InFO (Integrated Fan-Out) and CoWoS (Chip on Wafer on Substrate), which are foundational for supporting the most demanding application sectors including AI, High-Performance Computing (HPC), automotive systems, and next-generation mobile devices. Critically, strengthening the supply of CoWoS technology, a primary bottleneck in AI chip supply, is an urgent priority. Amkor’s substantial investment of $7 billion in its Peoria, Arizona facility will firmly establish its strategic and indispensable role as a partner within the domestic U.S. semiconductor ecosystem.
Technical & Economic Details
TSMC’s InFO and CoWoS technologies are essential for maximizing chip performance and power efficiency by densely integrating multiple logic dies and HBM (High Bandwidth Memory) stacks on a silicon interposer. InFO is a cost-effective, substrate-less fan-out packaging technology widely adopted in mobile devices. CoWoS, on the other hand, offers extremely high integration density and data transfer bandwidth for more complex AI/HPC chips. Amkor’s $7 billion investment will build production capabilities for these advanced packaging technologies in Arizona, contributing to the resilience and diversification of the domestic U.S. semiconductor supply chain. This investment is also expected to create thousands of new jobs and significantly boost regional economic development.
Background & Context
The rapid advancement of AI and the increasing demand for supply chain resilience are compelling governments and semiconductor companies worldwide to strengthen domestic manufacturing capabilities, particularly in advanced packaging. The U.S. government, through the ‘CHIPS Act,’ offers substantial incentives for domestic semiconductor manufacturing, and this partnership between TSMC and Amkor aligns perfectly with these policy objectives. The CoWoS supply shortage is one of the biggest bottlenecks in the current AI chip market, and alleviating this bottleneck is crucial for accelerating AI infrastructure deployment. As a key OSAT partner for TSMC, Amkor’s role in U.S. advanced packaging production will bolster America’s strategic position in the global semiconductor supply chain.
Strategic Significance & Outlook
The 10-year agreement between TSMC and Amkor will play a decisive role in Arizona’s development as a major hub for advanced semiconductor manufacturing and packaging. The expansion of domestic CoWoS production capacity will contribute to stabilizing AI chip supply, accelerating AI technology development and deployment in the U.S. Furthermore, this partnership will foster new technological innovations in advanced packaging and promote the creation of a more resilient and diversified global supply chain. Amkor’s role is expected to become even more critical as demand for U.S.-made advanced packaging chips increases in sectors such as automotive, HPC, and defense. This strategic partnership will define the new geopolitics and technological evolution of the semiconductor industry in the AI era.
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