The Chip Bottleneck Nobody Can Ignore Anymore

As chip demand surges, advanced packaging has become a bottleneck and a strategic asset, reshaping U.S. supply chains and investment priorities

8 Jan 2026

For years, advanced packaging sat quietly at the back end of chipmaking. Today, it has moved to center stage, becoming one of the most important pressure points in the semiconductor industry.

The change is driven by demand. Chips powering artificial intelligence, data centers, cars, and connected devices now need more than smaller transistors. Buyers want speed, efficiency, and compact designs bundled into ready-to-use systems. Advanced packaging makes that possible by tightly integrating multiple components into a single unit.

But capacity has not kept up. Building advanced packaging facilities takes heavy investment, specialized skills, and time. That gap has turned packaging into a choke point. Even when fabrication slots are available, limited packaging capacity can delay delivery and drive up costs.

Access, not just design, is now a competitive edge.

Amkor has stepped into that opening by expanding advanced packaging operations in the United States. The move reflects growing interest from customers looking for domestic options and shorter supply chains. For a country that has long trailed Asia in this area, it marks a meaningful shift toward rebuilding local capability.

Industry leaders are openly acknowledging the strain. Nvidia executives have said packaging remains one of the biggest production bottlenecks, slowing timelines across the sector. The message is blunt: making chips is no longer the hardest part. Finishing them is.

TSMC’s US strategy reinforces the point. Advanced packaging is part of its Arizona plans, including collaboration with Amkor to support local manufacturing. Packaging is no longer an afterthought tacked on overseas. It is tightly linked to where chips are made.

Analysts see a broader shift underway. Research from firms like BCG shows buyers focusing less on standalone chips and more on performance guarantees, supply security, and long-term partnerships. That change is reshaping contracts and investment decisions across the industry.

The costs are high and the complexity is real. Still, the direction is hard to miss. Advanced packaging has moved from supporting role to power lever. As demand spreads beyond AI into everyday technologies, it will help decide who wins and who waits in the chip economy ahead.