Apple, Amkor, and TSMC ‘neath the Arizona Skies

It is strategically essential for the US to bring home the manufacture of key components for the technology used across government, consumer, and enterprise markets, an imperative impacting IT leadership that will generate change across the coming decade.

That’s why it matters that Apple’s chip manufacturing partner, TSMC, has inked a deal with Amkor to “collaborate and bring advanced packaging and test capabilities to Arizona, further expanding the region’s semiconductor ecosystem.” Both TSMC and Amkor are investing in major projects in Arizona. Apple is the biggest customer of both firms.

Apple, Amkor, TSMC, ‘Neath the Arizona Skies

If this news sounds familiar it’s because Apple confirmed its own deal with Amkor to package Apple Silicon at TSMC last November. This made Apple the “first and largest” customer at Amkor’s new manufacturing plant, which at that time was billed as the “largest advanced packaging facility in the US.” 

Discussing that arrangement at the time, Apple Chief Operating Officer Jeff Williams said: “Apple is deeply committed to the future of American manufacturing, and we’ll continue to expand our investment here in the United States.” 

He characterized Apple as, “thrilled that Apple Silicon will soon be produced and packaged in Arizona.” Since then, TSMC has begun small-scale production of the A16 chip used in iPhone 15 and 15 Plus. 

Arizona becomes a silicon development powerhouse

The most recent announcement from Amkor and TSMC suggests the wind under this plan is blowing a little more strongly. The memorandum of understanding between the two companies means they will work together to bring “advanced packaging and test capabilities” to Arizona.

There is quite a lot more to the agreement:

• First, the pact confirms that Amkor and TSMC have been closely collaborating to deliver high volume, leading-edge technologies for advanced packaging and testing of semiconductors to support critical markets such as high-performance computing and communications. 
• Second, it tells us that TSMC will now contract turnkey advanced packaging and test services from Amkor in their planned facility in Peoria, AZ.
• These services will see particular use in advanced wafer fabrication.
• The partners believe that the geographical proximity of the two firms will accelerate product cycle times, which presumably means they’ll be able to accelerate processor design.

But what may perhaps be most important is that the companies intend to jointly define some packaging technologies, such as TSMC’s Integrated Fan-Out (InFO) and Chip on Wafer on Substrate (CoWoS). 

Chips in play

Apple watchers take note that InFO packaging features have been in chips since the A10 and also in the R1 chip inside Vision Pro. It is also notable that Google is expected to begin using chips with InFO packaging beginning in 2025. With many in tech coalescing around Arm-based processors, it’s hard not to see the strategic importance of bringing manufacturing into the US, particularly around AI.

CoWoS could also hold interesting opportunities for Apple, as it’s an advanced chip packaging tech that can efficiently link graphics processors, memory, and CPU together. There may be some implications as Apple is expected to move to 2nm chips (made by TSMC, designed by Apple’s silicon teams, and based on Arm reference designs) in 2025. 

TSMC Chairman and CEO C.C. Wei referenced this a little earlier in the year, telling Nikkei, “AI is so hot that all my customers want to put AI into their devices.” As history shows, Apple has now accomplished precisely that and Nvidia uses CoWoS chip packaging tech in its own high-performance graphics processors.

What the partners say

Speculation aside, this is what Amkor and TSMC had to say in a statement announcing the agreement: “Amkor is proud to collaborate with TSMC to provide seamless integration of silicon manufacturing and packaging processes through an efficient turnkey advanced packaging and test business model in the United States,” said Giel Rutten, Amkor’s president and CEO. “This expanded partnership underscores our commitment to driving innovation and advancing semiconductor technology while ensuring resilient supply chains.”

“Our customers are increasingly depending on advanced packaging technologies for their breakthroughs in advanced mobile applications, artificial intelligence and high-performance computing, and TSMC is pleased to work side by side with a trusted longtime strategic partner in Amkor to support them with a more diverse manufacturing footprint,” said Kevin Zhang, TSMC’s senior vice president of business development and global sales and deputy Co-COO. 

“We look forward to close collaboration with Amkor at their Peoria facility to maximize the value of our fabs in Phoenix and provide more comprehensive services to our customers in the United States.”

Designed in Arizona

It is almost certainly no coincidence these deals are all falling into place just two years after the US passed the CHIPS and Science Act to fund corporations such as TSMC and Amkor to increase investment in US semiconductor industries.

Apple last year confirmed that Amkor will invest approximately $2 billion in its Arizona project, even as Cupertino confirmed itself to be on target to invest $430 billion in the US economy by 2026. Of course, behind all of this, with the company quietly beginning iPhone manufacturing in Brazil, to what extent will future iPhones be American made?

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