Arizona Stakes Its Claim in the Chip Supply Chain

Amkor’s $7B Peoria campus brings advanced chip packaging to U.S. soil, reshaping supply chains and AI hardware by 2028

15 Dec 2025

Amkor Technology is expanding its investment in advanced semiconductor packaging in Arizona, committing up to $7bn to a two-phase assembly and test campus as US chipmakers seek to strengthen domestic supply chains and support rising demand for artificial intelligence hardware.

The project, in Peoria near Phoenix, has grown well beyond its original scope as customers increase spending on advanced packaging, a segment that has become central to chip performance and energy efficiency. Once completed, the site is expected to include about 750,000 sq ft of cleanroom space and employ several thousand workers, making it one of the largest US investments focused solely on chip assembly and testing.

Advanced packaging refers to techniques that combine multiple chips into a single system, allowing faster data transfer and lower power use. As progress from traditional chip scaling has slowed, these methods have become an important way to improve performance, particularly for AI and data centre processors.

For decades, most advanced packaging capacity has been based in Asia, even as US companies dominated chip design and increased domestic fabrication. That imbalance has drawn scrutiny as geopolitical tensions, supply disruptions and surging AI demand expose vulnerabilities in global production networks.

By locating packaging close to US fabrication plants and customers, Amkor aims to shorten production cycles and reduce reliance on overseas facilities. The Arizona site sits near a growing cluster of semiconductor manufacturing, including Taiwan Semiconductor Manufacturing Company’s new fabs, allowing closer coordination between front-end production and back-end assembly.

Industry analysts say the investment reflects a broader shift in how value is created in the semiconductor sector. Packaging, once treated as a lower-margin, back-end activity, is increasingly viewed as a strategic capability that can differentiate products and lock in customers.

The expansion is not without challenges. Advanced packaging requires specialised tools, a skilled workforce and secure access to materials that remain in tight supply globally. Construction is expected to run through the middle of the decade, with initial production targeted for 2028.

Even so, the scale of Amkor’s commitment highlights the growing importance of packaging in US semiconductor policy and corporate strategy, as companies look to build a more resilient and competitive domestic chip ecosystem.