Key Findings
Nvidia and Amkor Technology have entered into a multi-year advanced packaging services agreement valued at approximately $1.5 billion (about 230 billion JPY). This landmark partnership is strategically crucial for Nvidia, as it aims to alleviate bottlenecks in TSMC’s CoWoS (Chip-on-Wafer-on-Substrate) packaging capacity, a key supplier, and diversify its supply sources.
Technical & Business Details
This agreement enables Nvidia to leverage Amkor as a secondary packaging source beyond CoWoS, ensuring greater production capacity and supply stability for its AI chips. High-performance GPUs, particularly those integrating high-bandwidth memory (HBM), heavily rely on 2.5D/3D advanced packaging technologies like CoWoS. However, the explosive growth in AI demand has caused persistent supply shortages for TSMC’s CoWoS capacity.
Amkor is already advancing plans to establish significant 2.5D/3D advanced packaging capabilities in Arizona, supported by subsidies from the U.S. CHIPS and Science Act. This new facility aims to provide high-performance packaging solutions to customers like Nvidia, either complementing or rivalling CoWoS. This contract is expected to be a major catalyst for Amkor to solidify its strategic position within the AI chip advanced packaging supply chain and capture new growth opportunities.
- **Contract Value:** The packaging services agreement between Nvidia and Amkor is valued at approximately $1.5 billion.
- **Supply Diversification:** Nvidia aims to reduce reliance on TSMC’s CoWoS, enhancing supply chain stability.
- **Amkor’s Capacity Boost:** Amkor plans to build 2.5D/3D advanced packaging facilities in Arizona to expand AI chip supply.
Background & Context
The advent of the AI era has created unprecedented demand in the semiconductor industry, with advanced packaging capacity for high-performance AI chips emerging as a new bottleneck. While Nvidia dominates the AI GPU market, its production heavily depends on TSMC’s advanced processes and CoWoS packaging, which has been a primary cause of supply constraints. This agreement with Amkor is a strategic move by Nvidia to enhance its supply chain resilience and flexibly respond to future growth in AI chip demand. The U.S. CHIPS Act actively supports such initiatives to strengthen domestic semiconductor manufacturing and packaging capabilities.
Strategic Significance & Outlook
The partnership between Nvidia and Amkor has the potential to stabilize AI chip supply and accelerate the further development of AI technology. Amkor, through this contract, will enhance its competitiveness in the advanced packaging sector and significantly expand its AI-related revenues. Furthermore, the strengthening of advanced packaging capabilities by suppliers other than TSMC will promote diversification across the broader semiconductor industry’s supply chain, stimulating future technological innovation and market competition. This development signals the formation of a new ecosystem in AI chip design and manufacturing.
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