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Chips flown to Taiwan for packaging
Three steps to a chip
A semiconductor needs three things before it reaches the market: the equipment that makes it, such as EUV machines, the manufacturing itself, and the packaging. A country that onshores only the manufacturing still depends on the other steps. A durable dependency anywhere in that vertical chain cuts into the resilience the whole effort was meant to buy.
Going after packaging
The CHIPS office went hard at packaging for exactly that reason. It went directly to packaging companies, and it pressed chipmakers seeking federal funds to say where their chips would be packaged. Amkor announced a major advanced packaging project in Arizona, not far from where the TSMC plant is being built. Other companies committed to change where their packaging happens abroad, including one that promised that within five years it would have another packaging facility outside of China and Taiwan.
Matching policy to timing
Dependencies differ in how much they matter. One that can be addressed in a few months, like the mask equivalent, may not need a policy answer. An advanced packaging facility takes a couple of years to build and is expensive, so it calls for a comprehensive policy framework.
Why does packaging matter for AI chips?
Packaging connects the silicon die to the circuit board and protects it. Advanced packaging goes further by placing several dies side by side or stacked in one package, which shortens the distance data travels between them. AI accelerators depend on this to link processors with high-bandwidth memory. TSMC's CoWoS packaging is used in many Nvidia AI accelerators.
How did packaging end up in Asia?
Chip assembly is labor intensive, and American firms moved it overseas in the 1960s to cut costs. Fairchild Semiconductor opened an assembly plant in Hong Kong in 1962. Other US firms followed with plants across Asia. Over the decades, specialist companies that only assemble and test chips, called OSATs, grew up there.
Why does a packaging plant take years?
A plant needs cleanrooms, which filter the air to keep particles from landing on the chips. Advanced packaging requires precise tools that are built to order and often have long delivery lead times. The site also needs power, ultrapure water, and trained technicians before production can start. Cleanrooms are graded under the ISO 14644 standard by how many particles are allowed per cubic meter of air.
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