Amkor shifts $2 billion chip packaging plant to larger Peoria site to bolster U.S. semiconductor security by 2028

Amkor recently revised the site for its new advanced packaging and test facility to a 104-acre plot in the Peoria Innovation Core, north Peoria, Arizona. The Peoria City Council approved the land swap a few days ago, on August 29, replacing the previously designated 56-acre Vistancia parcel. Construction is slated to begin in a few days, with production aimed to start in early 2028. The company claims the investment will total $2 billion, with approximately 2,000 jobs to be created.

City leaders frame the move as a “historic milestone” that strengthens the U.S. semiconductor supply chain. Amkor says the larger site allows for better flexibility in meeting growing customer demand. The company has also been operating in Greater Phoenix since 1984 and plans to support customers in the computing, communications, and automotive sectors from the new plant.

The new fab aims to combat current issues in the semiconductor supply chain. Assembly, testing, and packaging are concentrated in Taiwan and South Korea, resulting in bottlenecks that have constrained the production of AI chips, such as the Nvidia H100. The Peoria facility will support high-performance packaging platforms, such as TSMC's CoWoS and InFO, used in data-center GPUs, and, although unconfirmed, Apple silicon. TSMC signed a memorandum of understanding to route packaging from its Phoenix fabs to Amkor, shortening turnaround.

The project is backed by $407 million from the CHIPS Act plus federal tax credits, positioning it as one of the most ambitious outsourced packaging efforts on U.S. soil, aiming to keep the U.S. competitive in multi-die systems. At the same time, the national semiconductor talent shortfall of roughly 70,000 to 90,000 workers may pose issues for the new plant, as automation alone cannot fully close the gap. Amkor plans to coordinate with TSMC and other Arizona players to build out an ecosystem.

Do not expect immediate relief for AI server shortages, however. Packaging capacity for the next few years will still rely on Asian packaging, with the U.S. impact only beginning once Peoria comes online in early 2028. Key milestones to watch include: groundbreaking and early construction progress, tool installation, hiring and training ramps, supplier localization, and initial capacity targets.