NVIDIA commits $1.5 billion to expand US capacity for next-gen advanced chip packaging

NVIDIA is partnering with semiconductor packaging company Amkor Technology to develop advanced packaging and testing technologies for next-generation AI and accelerated computing systems, while helping expand Amkor’s US capacity in Arizona. The multi-year partnership will align the companies’ technology roadmaps around advanced packaging methods, including high-density interconnects and heterogeneous integration. NVIDIA will also provide a prepayment to support the expansion of Amkor’s US advanced packaging capacity. The deal comes as increasingly powerful computing systems push chipmakers to find new ways to combine processors, memory and other components while keeping power consumption and data-transfer bottlenecks under control. Advanced packaging has become a critical part of this effort. Instead of relying only on making individual chips smaller, manufacturers can combine different types of silicon and components in a single package. This can improve performance and energy efficiency while allowing specialized chips to work together more closely. Packaging becomes strategic The NVIDIA-Amkor partnership will focus on bringing these technologies to market at scale as demand for AI infrastructure grows. Amkor already provides advanced packaging solutions for NVIDIA products, including data center processors, networking chipsets and accelerated computing systems. The companies now plan to expand that relationship by developing new packaging and testing capabilities designed for future computing platforms. For NVIDIA, the partnership also helps secure access to advanced packaging capacity as its hardware portfolio grows. For Amkor, it strengthens its position as a key supplier supporting the increasingly complex systems behind modern data centers. “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, Executive Vice President of Operations at NVIDIA. “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.” The partnership also has a geographic dimension. Amkor plans to expand its advanced packaging operations in Arizona, adding US capacity to its existing manufacturing footprint across Asia. That expansion is aimed at building a more geographically diverse supply chain for advanced packaging and testing. These services are increasingly important to the semiconductor industry but have historically been concentrated in parts of Asia. AI chips need smarter packaging The engineering challenge is becoming more complex as computing systems increasingly rely on multiple types of chips working together. Heterogeneous integration allows components built using different technologies to be combined into one system. High-density interconnects, meanwhile, help move data between those components at high speeds. Both approaches are becoming important as AI workloads demand greater computing performance and faster communication between processors and memory. By developing packaging and testing technologies alongside capacity in the US, NVIDIA and Amkor are targeting both sides of the challenge: building more capable systems while creating a supply chain that can support them. “This strategic partnership with NVIDIA underscores the central role advanced packaging plays in enabling the future of AI,” said Kevin Engel, chief executive officer of Amkor Technology. “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 collaboration will span the United States and Asia, linking technology development with manufacturing capacity as AI computing platforms continue to evolve. The partnership highlights a broader shift in the semiconductor industry, where advanced packaging is becoming as important to system performance as the chips themselves. Recommended ArticlesGet the latest in engineering, tech, space & science - delivered daily to your inbox.With over a decade-long career in journalism, Neetika Walter has worked with The Economic Times, ANI, and Hindustan Times, covering politics, business, technology, and the clean energy sector. Passionate about contemporary culture, books, poetry, and storytelling, she brings depth and insight to her writing. When she isn’t chasing stories, she’s likely lost in a book or enjoying the company of her dogs.