Nvidia secures US chip packaging with $1.5bn Amkor deal
Nvidia is paying Amkor $1.5 billion to expand semiconductor packaging in Arizona, a move that eliminates a major AI production bottleneck and accelerates the United States' push to build a self-contained chip supply chain independent of Asia.
Nvidia has agreed to pay Amkor Technology $1.5 billion to expand advanced semiconductor packaging and testing in the United States, the companies announced on 23 July. The prepayment pushed Amkor shares up by roughly 12% in after-hours trading.
The agreement zeroes in on a critical but often overlooked production bottleneck. While attention usually focuses on silicon fabrication, the actual constraint on Nvidia's AI accelerator shipments has recently been the subsequent step: stitching finished silicon with memory into the dense modules that run AI servers.
This prepayment continues a deliberate Nvidia strategy to eliminate supply vulnerabilities. After securing new US plants from Corning and locking down HBM4 memory from SK Hynix, the company is now applying its balance sheet to guarantee the final stage of manufacturing. By providing upfront cash rather than taking an equity stake, Nvidia is funding the construction of capacity that suppliers might otherwise hesitate to build alone.
For European policymakers and investors, the deal is a stark illustration of how rapidly the US is closing its domestic supply chain gaps. As Washington subsidises a self-contained semiconductor ecosystem in Arizona, Europe’s own efforts to attract advanced packaging risk being overshadowed. Concentrating this capacity outside Asia removes a major geopolitical vulnerability for US tech, but it also deepens the transatlantic divide in AI hardware production.
The funding will expand Amkor’s $2 billion facility in Peoria, Arizona, a site that already secured $407 million under the CHIPS and Science Act. Crucially, the plant sits close to TSMC’s Arizona fabs, allowing wafers to be packaged domestically rather than being shipped back to Asia for final assembly.
The arrangement deepens existing ties rather than creating new ones, as Amkor already packages chips for both Nvidia and AMD. In June, Amkor signed a 10-year agreement with TSMC for advanced packaging in Arizona, transforming a once-obscure assembler into a critical node in the American chip build-out. Under the new Nvidia deal, the two companies will jointly develop high-density interconnects and heterogeneous integration for next-generation AI platforms.
“AI is driving a generational shift in technology, transforming every industry and creating a unique opportunity to reinvigorate American manufacturing and supply chains,” said Debora Shoquist, Nvidia’s executive vice-president of operations. Amkor’s chief executive, Kevin Engel, said the partnership “underscores the central role advanced packaging plays” in the future of AI.
