TSMC is expanding the capabilities of its chip plant in Arizona by partnering with the US-based Amkor Technology to add advanced packaging and test capabilities. The move will result in more US-based Apple chip production in the future.
Amkor headquarters in Arizona [Amkor]
TSMC's Arizona plant is just getting started with its operations after four years of construction, with the production of A16 chips at the facility in September. However, while manufacturing the chips is one thing, it still needs to be packaged.
Chip packaging is one of the last steps in producing a usable chip that can be used in Apple's hardware. While TSMC makes the chip itself, chip packaging refers to the protective elements around the chip, which are also used to interface with a board.
On Thursday, Amkor and TSMC said they had signed a memorandum of understanding to "collaborate and bring advanced packaging and test capabilities to Arizona." Under the agreement, Amkor will be contracted to provide turnkey advanced packaging and test services to the Arizona TSMC plant.
This will be used to support TSMC's clients, "particularly those using TSMC's advanced wafer fabrication facilities in Phoenix." With Apple's chips reportedly being made at the facility, this would mean chips destined for future iPhone units and Mac models.
For TSMC and its clients, the agreement can help save time in production, since the chips can be made and packaged at the same place. Otherwise, the chips would have to be transported elsewhere in the Apple supply chain for packaging.
The two companies working together was practically a foregone conclusion, since Apple and Amkor announced a packaging facility was going to be built very close to TSMC's foundry in 2023. That partnership is expected to cost Amkor around $2 billion and introduce around 2,000 jobs to the area.
Like TSMC, Amkor has been a long-time partner with Apple, and has done so for over 12 years.