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The Biden-Harris Administration revealed that the U.S. Department of Commerce and Amkor Technology, Inc. (NASDAQ:AMKR) signed a preliminary memorandum of terms to provide up to $400 million in funding under the CHIPS and Science Act.
This funding supports Amkor’s planned $2 billion semiconductor packaging facility in Peoria, Arizona, which is expected to create 2,000 jobs and boost the domestic semiconductor supply chain.
Amkor announced in November 2023 its plans to build its first domestic outsourced semiconductor assembly and test facility in Peoria, Arizona.
Amkor’s Arizona facility will utilize technology, including 2.5D technology crucial for AI and high-performance computing.
President Biden’s CHIPS and Science Act, a pivotal part of his Investing in America agenda, aims to revitalize U.S. semiconductor manufacturing, enhance supply chain security, and foster job creation.
The proposed funding will help Amkor build the largest advanced packaging facility in the U.S., supporting high-performance computing, AI, communications, and automotive markets.
Amkor has secured approximately 55 acres and intends to build the campus with more than 500,000 square feet of clean room space. The first phase of the manufacturing facility is targeted to be ready for production within three years.
Commerce Secretary Gina Raimondo highlighted the significance of this investment in meeting the rising demand for AI chips and securing economic and national security.
Also Read: Intel Taps Micron Leader To Strengthen AI Chip Strategy
This initiative ensures that companies like Taiwan Semiconductor Manufacturing Company Ltd (NYSE:TSM), Apple Inc (NASDAQ:AAPL), and GlobalFoundries Inc (NASDAQ:GFS) can package and test essential chips domestically, reinforcing the entire chip manufacturing process within the U.S.
Amkor plans to take advantage of the Department of the Treasury’s Investment Tax Credit, which is expected to be up to 25% of qualified capital expenditures.
In addition to the proposed direct funding of up to $400 million, the CHIPS Program Office would make approximately $200 million of proposed loans, which is part of the $75 billion in loan authority provided by the CHIPS and Science Act, available to Amkor under the preliminary memorandum of terms.
Price Action: AMKR shares are trading lower by 0.75% at $37.90 at last check Friday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo via Shutterstock
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