GlobalFoundries said it would manufacture a key component for TSMC’s CoWoS advanced packaging technology, establishing a US production base for the component, called a silicon interposer.

The deal, valued at $2 billion (£1.5bn) over five years, means that TSMC customers will be able to market products as having been entirely manufactured and packaged within the US.

Under the agreement, GlobalFoundries is to expand capacity at its plant in Malta, New York, with the aim of beginning volume production of silicon interposers in the first half of 2028.

Advanced packaging

Ed Kaste, senior vice president of CMOS at GlobalFoundries, which was created by the divestiture of AMD’s manufacturing arm in 2009, said the deal would create a secure source of advanced-packaging elements that would strengthen the semiconductor supply chain.

Interposers are custom pieces of silicon that provide high-performance connections between logic chiplets and high-bandwidth memory (HBM) units and enable the creation of multi-die processors typically for AI or high-performance computing uses.

TSMC last week said it would invest $100bn to expand its existing operations in the Phoenix, Arizona area, on top of existing $165bn in investments.

The company is also considering expanding manufacturing operations into the Dallas area, Bloomberg reported.

US production

In April TSMC began work on a packaging plant in Arizona that is expected to begin operations in 2029.

The company said at the time that it was aggressively expanding its CoWoS and 3D-IC packaging capabilities within its existing Arizona manufacturing facility.

Packaging has become a bottleneck for advanced chips such as those produced by TSMC in Arizona for companies including Apple and Nvidia, with many chips being sent back to Taiwan for final assembly.

TSMC began 4nm chip production in Arizona in January of last year.