$1,500,000,000 Nvidia-Amkor Pact Aims to Rebuild America’s AI Chip Supply Chain

A new multi-billion-dollar deal seeks to rebuild a key missing piece of America’s artificial intelligence chip supply chain.

Nvidia will pay chip packaging firm Amkor Technology a $1.5 billion prepayment as part of a “multi-year” partnership to expand advanced packaging operations in Arizona, according to a Thursday press release from Amkor. Advanced packaging, which assembles chips to power AI technologies, is predominantly completed in Asia.

The Asia Pacific region holds more than 80 percent of global Outsourced Semiconductor Assembly and Test (OSAT) capacity, according to SNS Insider.

The two firms plan “to create a geographically diverse and resilient global supply chain” and expand Amkor’s manufacturing to the U.S, the press release stated. Amkor’s existing advanced packaging has historically been located in Asia.

When asked for comment, a spokesman for Nvidia told the Daily Caller News Foundation to reference a statement from Debora Shoquist, the company’s Executive Vice President of Operations, featured in the press release.

“AI is driving a generational shift in technology, transforming every industry and creating a unique opportunity to reinvigorate American manufacturing and supply chains,” Shoquist said. “Amkor’s global capabilities, combined with their committed investment in the United States, are critical components of building resilient AI infrastructure and accelerating next-generation technologies.”

Amkor did not immediately respond to the DCNF’s request for comment.

Advanced packaging is the final assembly stage for chips, in which several chips and memory are combined together to create finished chips used for AI technology, according to TSMC’s website.

“This strategic partnership with NVIDIA underscores the central role advanced packaging plays in enabling the future of AI,” Kevin Engel, chief executive officer of Amkor Technology said, per the Arizona-based company’s press release. “Our agreement with NVIDIA accelerates our long-term roadmap and supports our ability to deliver full turnkey advanced packaging and test solutions, leveraging our global footprint while expanding U.S. capabilities to support critical AI infrastructure.”

The U.S. is “more reliant on Taiwan than ever” thanks to advanced chip packaging, the New York Times reported in June. The Taiwan Semiconductor Manufacturing Company packages “nearly all” chips for its Taiwanese partners, Nvidia, and other tech firms in the chip industry.

Asia Times called advanced packaging the “next front in the chip wars” in August 2024, citing China’s significant presence in the chip market and TSMC simultaneously expanding its capacity for advanced packaging in Taiwan.