Amkor Technology has signed a new $1.3 billion agreement with NVIDIA to expand advanced packaging capacity in South Korea, the company announced on October 21 via Business Wire. With this latest commitment, Amkor’s multi-year agreements with NVIDIA in Arizona and South Korea now total $3 billion, all aimed at keeping packaging capacity ahead of demand for next-generation AI and accelerated computing platforms.
Amkor shares rose 10% in premarket trading after the announcement, according to Seeking Alpha’s staff report. The agreement is structured around prepayments that align Amkor’s manufacturing capacity with NVIDIA’s long-term growth plans.
Prepayments For Packaging Capacity On Two Continents
Advanced packaging — the stage that assembles and connects finished silicon into working systems — has become one of the binding constraints on AI hardware supply, and NVIDIA has increasingly paid in advance to reserve it. “Our partnership with NVIDIA underscores the critical role advanced packaging plays in enabling next-generation AI platforms,” said Kevin Engel, Amkor’s president and chief executive officer. “These investments build on our global manufacturing footprint and strengthen our ability to support customers through our operations in both the United States and South Korea.”
Debora Shoquist, NVIDIA’s executive vice president of operations, made the same point from the buyer’s side: “Growing demand for accelerated computing is increasing the need for advanced packaging capacity. Our work with Amkor helps us scale production of current and next-generation platforms while strengthening the resilience of our global supply chain.” The South Korea expansion builds on the companies’ recent Arizona collaboration, where Amkor is building advanced packaging capacity in the United States alongside TSMC’s Arizona fabs.
A Distinct Commitment From This Week’s Supply-Chain Release
The Amkor agreement is a separate corporate commitment from the capacity figures NVIDIA itself published earlier on October 21, when its supply-chain expansion release said Amkor’s packaging capacity would grow by more than 300% by the end of 2028 as part of a six-partner programme. That release described planned capacity growth across substrates, packaging, testing and optical engines; the Amkor announcement puts a price on Amkor’s own share — $1.3 billion of new agreements, $3 billion in total across the two countries — and ties it to prepayment terms rather than capacity percentages. The packaging bottleneck is the same one behind moves such as Samsung’s use of TSMC’s 3nm process for NVIDIA memory, and it is central to the economics set out in How NVIDIA Makes Money From AI.
Why It Matters
The $1.3 billion figure matters because it shows NVIDIA converting its balance sheet into guaranteed back-end capacity years ahead of production — a shift from ordering packaging as needed to financing the factories that provide it. For Amkor, a $3 billion cumulative commitment from a single customer reshapes its investment case and its geography, spreading advanced packaging for AI accelerators between South Korea and Arizona rather than concentrating it in one region. For the wider AI supply chain, each prepayment of this size is a signal that the constraint on AI hardware through 2027 and 2028 sits as much in packaging and testing as in wafer supply, and that NVIDIA intends to hold its place at the front of that queue.
Background
Amkor Technology, headquartered in Tempe, Arizona and listed on Nasdaq, is one of the world’s largest providers of outsourced semiconductor packaging and test services, with major operations in South Korea. NVIDIA has spent 2026 locking down its manufacturing chain ahead of the Vera Rubin generation, prepaying partners across substrates, packaging and testing; earlier this year it agreed a separate $1.5 billion prepayment with Amkor for US capacity, and in July 2026 Amkor signed a 10-year Arizona packaging agreement with TSMC.
Source: Business Wire
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