Nvidia signs US$1.5 billion pact with Amkor for US chip packaging

SINGAPORE, 24 JULY 2026 —

Nvidia Inks $1.5 Billion Deal with Amkor to Boost US Chip Packaging Capacity

KUALA LUMPUR — Nvidia Corp. has signed a US$1.5 billion agreement with Amkor Technology Inc. to expand semiconductor packaging capacity in the United States, as part of a broader strategy to strengthen domestic chip production amid global supply chain constraints.

The deal, announced on July 23, includes a prepayment from Nvidia to Amkor, which will use the funds to enhance its manufacturing operations in Arizona. The collaboration aims to develop advanced chip packaging and testing technologies tailored for artificial intelligence (AI) applications, a critical segment driving semiconductor demand.

Amkor’s shares surged nearly 15% in after-hours trading following the announcement. The Tempe, Arizona-based company is a global leader in outsourced semiconductor assembly and test services, with existing production hubs across Asia. The expansion in the US is expected to create a more geographically diverse supply chain, reducing reliance on Asian manufacturing hubs.

Semiconductor packaging is the final stage of chip production, where components are encased and connected to other hardware. As AI-driven demand accelerates, advanced packaging has become a bottleneck due to the need for specialized materials and techniques to support high-performance computing in data centers.

The agreement aligns with Nvidia’s broader push to dominate the AI chip market, where it holds a dominant position as the leading supplier of AI accelerators—high-value chips essential for training and running AI models. Industry analysts note that advanced packaging is increasingly critical as AI workloads grow more complex, requiring tighter integration between chips and computing systems.

Impact on Malaysia’s Semiconductor Sector While the deal focuses on US-based expansion, it underscores the broader trend of semiconductor firms diversifying supply chains away from Asia, where Malaysia plays a key role as a major outsourcing hub for chip assembly and testing. Local industry players may face both opportunities and challenges as global players like Nvidia and Amkor invest in alternative geographies.

Malaysia’s semiconductor industry, which contributes significantly to the country’s export earnings, could see increased competition for skilled labor and infrastructure investments. However, the deal may also spur demand for specialized packaging technologies, potentially benefiting Malaysian firms with expertise in advanced assembly and testing.

Sector and Company Specifics Nvidia, currently the world’s most valuable company, has been aggressively expanding its AI ecosystem through partnerships and acquisitions. The US$1.5 billion investment in Amkor is part of a series of agreements aimed at securing chip packaging capacity to meet surging AI demand.

Amkor, a long-standing player in the semiconductor assembly and test market, operates multiple facilities in Asia, including Malaysia, where it has a significant presence. The Arizona expansion will complement its existing operations, creating a more resilient supply chain capable of supporting high-end AI applications.

Outlook The Nvidia-Amkor partnership reflects the semiconductor industry’s shift toward vertical integration and supply chain diversification. As AI adoption accelerates, demand for advanced packaging solutions is expected to grow, driving further investments in US-based manufacturing.

For Malaysia, the deal highlights the need to enhance its competitive edge in semiconductor packaging and testing. While the immediate impact may be limited, the long-term implications could reshape global supply chains, potentially influencing Malaysia’s role in the industry.

Details on the timeline for the Arizona facility’s expansion and specific technological advancements remain undisclosed.

Related: Nvidia · Singapore