US Packaging Push Sparks Battle for AI’s Future

Amkor and TSMC expand US chip packaging to anchor AI growth and secure supply chains

10 Dec 2025

The US effort to revive its semiconductor industry gained momentum this year with new investment in advanced chip packaging, a crucial but often overlooked stage of production that could influence the direction of artificial intelligence hardware.

Amkor Technology’s plan to build a major packaging campus in Peoria, Arizona, has been viewed as a key step in strengthening domestic control over a process long dominated by Asia. The facility, located near new fabrication plants, is intended to give chipmakers a way to complete high-performance designs within the US rather than sending wafers abroad for final assembly.

The expansion comes as demand for AI accelerators and high-performance processors increases. These systems rely on chiplets, modular components that require complex packaging techniques available at only a small number of global sites. While US fabs can produce leading edge silicon, most of it still undergoes finishing overseas, adding cost and logistical risk.

Industry observers say the push for local packaging capacity could shift competitive dynamics. “Closer integration between fabrication and packaging strengthens the ecosystem by making production faster and more secure,” said one analyst. Taiwan Semiconductor Manufacturing Co, which is also investing in packaging and fabrication plants in Arizona, has said that regional supply chains are essential to meet AI’s rapid growth.

Challenges remain. Advanced packaging depends on costly tools and highly skilled engineers, and experts warn that workforce development may lag behind rising demand. Supply networks for materials and precision equipment will also need to expand in parallel.

Even so, optimism is growing across the sector. Many see the build out of packaging as a chance for the US to regain influence in the global semiconductor market.

For technology firms, the implications could be wide ranging: shorter production cycles, improved supply security, and a stronger domestic base for AI and cloud computing hardware. As construction advances and investment gains pace, the US appears set to reclaim ground in the global chip race with a renewed focus on advanced manufacturing.