TAIPEI (Taiwan News) — Taiwan Semiconductor Manufacturing Company (TSMC) announced Friday (Oct. 4) that it signed a memorandum of understanding with Amkor to expand packaging and testing capacity.

Under this agreement, TSMC will use Amkor's planned facility in Peoria, Arizona, to offer turnkey advanced packaging and testing services, per CNA. This move aims to support customers, particularly those producing chips at TSMC's advanced wafer plant in Phoenix.

TSMC said the proximity of the Arizona plant to Amkor’s backend packaging and testing facility will shorten the overall product production cycle.

TSMC Senior Vice President of Business Development and Global Sales and Deputy Co-COO Kevin Zhang (張曉強) said that customers increasingly rely on advanced packaging technologies to achieve breakthroughs in AI, high-performance computing (HPC), and mobile applications.

TSMC and Amkor, as long-term strategic partners, are working together to support these customers with a more diversified production base, he added.

Amkor President and CEO Giel Rutten said this partnership demonstrates Amkor's commitment to driving innovation and advancing semiconductor technology while ensuring supply chain resilience.

In December 2023, Amkor announced a US$2 billion investment (NT$64 billion) to establish an advanced packaging and testing facility in Arizona, reported CNA.