TSMC to add advanced chip packaging in Arizona by 2029

Taiwan chipmaker TSMC said on April 22 that it plans to add advanced chip packaging in Arizona before 2029.

The construction started at an existing site as it seeks to ease a bottleneck in US AI chip production.

The plant will support CoWoS and 3D-IC packaging, which are used in AI chips from customers such as Nvidia.

TSMC has applied for permits for the project, said Kevin Zhang, deputy co-COO.

TSMC already makes chips in Arizona for customers including Apple and Nvidia.

Amkor Technology has said it aims to open an Arizona packaging plant by mid-2027 and start production in early 2028.

🔗 Source: Reuters

🧠 Food for thought

Implications, context, and why it matters.

TSMC also has a memorandum of understanding with Amkor, a US chip packaging and testing company, to add advanced packaging in Arizona 1.
TSMC’s most advanced packaging lines are already full, so it needs trusted partners for part of the work 2.
Under the deal, TSMC will buy turnkey advanced packaging and test services from Amkor’s planned Peoria, Arizona, facility for wafers made at TSMC’s Phoenix chip plants 1.
The two companies will work out which packaging technologies to use, including TSMC’s Integrated Fan-Out (InFO) and Chip on Wafer on Substrate (CoWoS), for shared customer demand in high-performance computing, which covers powerful systems for AI and scientific computing 1.

This adds to a fuller semiconductor base in the US, pairing TSMC’s Arizona fabrication plants with packaging capacity planned in the same state 3.
Keeping those sites close could shorten development timelines and cut the hassle of sending Arizona-made chips to Taiwan for packaging 1.
That setup could make supply chains more resilient for TSMC’s US customers. It also lowers exposure to disruptions such as recent helium supply concerns. Helium is a gas used in chip manufacturing 3.
The Arizona hub also moves the US closer to bringing more technology manufacturing home, supporting AI, high-performance computing, and advanced mobile applications 3.