Amkor Technology Inc.'s plans to build a $2-billion semiconductor advanced packaging manufacturing plant in Peoria, Ariz., are advancing with support from the U.S. Dept. of Commerce.

The Tempe, Ariz.-based tech manufacturer announced its plans for the outsourced semiconductor assembly and test, or OSAT, facility last fall. It would be Amkor’s first OSAT in the U.S. and the largest OSAT built in the U.S. so far, according to the company. 

Last month, the U.S. Dept. of Commerce announced that it had reached preliminary non-binding terms with Amkor to provide the company with $400 million in direct funding plus up to $200 million in loans from 2022’s CHIPS and Science Act, which set $39 billion to support construction, expansion and modernization of domestic semiconductor manufacturing plants. Amkor also indicated it plans to claim an investment tax credit that can cover up to 25% of certain costs. 

“One of the fundamental goals of the CHIPS and Science Act is creating an advanced packaging ecosystem in the U.S. to ensure full start-to-finish chip production occurs domestically,” Commerce Secretary Gina Raimondo said in a statement. “Advanced packaging drives chip innovation at all levels.”

Peoria has also committed to covering $3 million in infrastructure costs to accommodate the facility.

Amkor plans to have more than 500,000 sq ft of clean room space at the 55-acre Peoria campus. It aims for the first phase of the manufacturing facility to be ready within three years. The company did not immediately respond to inquiries about contracting for the project. 

The company has already lined up its first customer for the facility, Apple. Amkor says it worked with Apple on its plans for the plant, as the facility will package and test chips produced for Apple nearby by TSMC at its under-construction plants in Phoenix. In semiconductors, “packaging” refers to casing around the semiconductor, which it protects and provides with connection to other chips.

“Amkor’s Arizona facility will enable us to support the growing semiconductor manufacturing community … and we look forward to providing our customers with domestic advanced packaging and test capabilities,” said Giel Rutten, president and CEO of Amkor, in a statement.