Apple Inc. today announced that it will become the first and largest customer of a $2 billion chip packaging facility Amkor Technology Inc. is building in Arizona.

The facility will process chips that Taiwan Semiconductor Manufacturing Co. plans to make for Apple at a nearby fab complex. Last December, TSMC estimated that the complex will cost $40 billion to build. It’s expected to house two fabs: One will make processors based on a four-nanometer process, while the other is set to use three-nanometer technology.

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

A processor can’t be immediately installed in a computer or smartphone after manufacturing. Rather, it must first be placed in a so-called chip package. This is a collection of hardware modules that shields the processor from the elements, links it to the other components of the device in which it’s installed, and dissipates the heat the processor generates.

In recent years, chip packaging has also taken on another role. Many modern processors are implemented not as a single piece of silicon but rather as a collection of miniature compute modules that are manufactured separately. Specialized chip packaging links those modules together in a way that allows them to act as a single processor.

Tempe, Arizona-based Amkor is one of the industry’s top chip packaging suppliers. It generated $7.1 million in revenue last year from contracts with Apple, Qualcomm Inc. and other major tech firms. It provides chip packaging components and services to its customers using a network of facilities that spans over half a dozen countries.

The company says it worked with Apple to develop the “strategic vision and initial manufacturing capability” for the new $2 billion facility it’s building in Arizona. Besides packaging chips, workers at the hub will also provide hardware testing services.

Amkor didn’t specify exactly what packaging components it will supply for Apple. The companies did, however, divulge today that they have been working together for more than a decade. They detailed Amkor packages chips that are “used extensively in all” Apple products.

Processors are not produced individually but rather as part of silicon wafers that can each contain up to hundreds of chips. Amkor is a major supplier of wafer-level packaging, or WLP, a type of chip packaging that is applied to processors before they’re separated from the wafer that hosted them during manufacturing. WLP reduces chips’ space requirements, which has helped make the technology popular in the mobile device industry.

Apple is known to have included WLP components in a number of early iPhone models, but it’s unclear if the company still uses the technology. It’s also possible Amkor’s Arizona fab will make through-silicon vias, or TSVs, for Apple. TSVs are microscopic electric wires that can be used to make interposers, components capable of linking multiple chiplets into one large processor. Apple ships an internally developed interposer with the M1 Ultra processor that powers the Mac Studio.

Amkor’s upcoming facility in Arizona will be built on a 55-acre campus and is set to feature 500,000 square feet of clean room space, or space suitable for hosting manufacturing equipment. The chip packaging hub is poised to become the largest facility of its kind in the U.S. when it comes online. Amkor expects to complete the first phase of the construction process within two to three years and estimates the hub will employ more than 2,000 workers once it’s fully operational. 

Photo: Amkor