Infineon and Amkor Deepen Partnership and Strengthen European Supply Chain for Semiconductor Solutions

Rhea-AI Summary

Infineon Technologies AG partners with Amkor Technology, Inc. to strengthen its outsourced backend manufacturing footprint in Europe, establishing a packaging and test center in Porto. Operations set to begin in the first half of 2025, enhancing the semiconductor supply chain and resilience for automotive customers.

Insights

Supply Chain Analyst

The partnership between Infineon Technologies AG and Amkor Technology, Inc. represents a strategic move to bolster the European semiconductor supply chain. By establishing a dedicated packaging and test center in Porto, the companies are addressing two critical industry challenges: supply chain resilience and geographic diversification.

From a supply chain perspective, the initiative is a proactive measure against potential disruptions. The semiconductor industry has faced significant strain, with demand outpacing supply and geopolitical tensions exacerbating vulnerabilities. The dedicated facility in Porto offers a buffer by ensuring that part of the production cycle is within close proximity to European end markets, especially the automotive sector, which is heavily reliant on semiconductors.

Moreover, the expansion of Amkor's facilities with advanced packaging and test technology portfolio is indicative of the industry's shift towards more sophisticated semiconductor solutions. This move not only caters to the current demand for high-performance chips but also positions both companies favorably for future technological advancements.

Automotive Industry Analyst

The deepening collaboration between Infineon and Amkor underscores the strategic importance of the automotive industry as a key driver of semiconductor demand. With the ongoing electrification of vehicles and the increase in electronic content per car, the need for reliable semiconductor supply has never been greater.

Automotive customers require stringent quality standards and just-in-time delivery to maintain production efficiency. The onsite team from Infineon, providing engineering and development support, is a testament to the commitment to quality and innovation in semiconductor manufacturing. This partnership could potentially lead to enhanced product performance and reliability, which are paramount in automotive applications.

Furthermore, Infineon's decision to expand its footprint in Portugal reflects confidence in the local semiconductor ecosystem. The investment in Porto may stimulate job creation and technical expertise in the region, contributing to the economic vitality and potentially attracting more high-tech investments in the future.

Financial Analyst

The announcement of Infineon's partnership with Amkor is a significant development for investors to consider. The long-term nature of the agreement suggests a stable and predictable cost structure for Infineon's outsourced manufacturing needs, which can lead to improved financial planning and margin stability.

Investors should note that the capital expenditure required to expand Amkor's facilities might impact short-term financials; however, the strategic benefits and potential for long-term cost savings could offset this. The increased capacity and advanced technology offerings could lead to revenue growth as the companies capture more market share in the automotive and industrial end markets.

It's also important to consider the potential competitive advantages this partnership may confer. By securing a dedicated production line, Infineon may achieve a faster time-to-market for its products, which is important in the fast-paced semiconductor industry. This could lead to a stronger competitive position and possibly enhanced shareholder value over time.

MUNICH & TEMPE, Ariz. & PORTO, Portugal--(BUSINESS WIRE)-- Infineon Technologies AG (FSE: IFX / OTCQX: IFNNY), a leader in power systems and IoT, is strengthening its outsourced backend manufacturing footprint in Europe and announced a multi-year partnership with Amkor Technology, Inc. (Nasdaq: AMKR), a leading provider of semiconductor packaging and test services. Both companies have agreed on operating a dedicated packaging and test center at Amkor’s manufacturing site in Porto. Operations are expected to commence in the first half of 2025.

With this long-term agreement, Infineon and Amkor further strengthen their partnership, extending the classical outsourced semiconductor assembly and test (OSAT) business model. Amkor will expand its facilities in Porto and run the production line, providing dedicated clean room space, and Infineon will provide an onsite team with engineering and development support. The cooperation further strengthens the European semiconductor supply chain and contributes to making it more resilient – especially for automotive customers. It complements Infineon's already diversified manufacturing footprint, balancing in-house and outsourced production capabilities.

“We are pleased to further deepen our partnership with Amkor and will contribute with our engineering and development expertise,” said Alexander Gorski, Executive Vice President and responsible for Infineon’s global Backend Operations. “Infineon and Amkor are jointly increasing geographical resilience and supply security for our customers. Together, we are strengthening Europe’s importance as a location for semiconductor manufacturing. For 20 years, Infineon has been successfully operating a large service center in Porto, now with more than 600 employees. With the joint manufacturing center, we are becoming even more deeply rooted in Portugal’s excellent semiconductor ecosystem. We are looking forward to further increasing our footprint in Portugal.”

“Amkor is proud to expand our partnership with Infineon,” said Giel Rutten, Amkor’s president and chief executive officer. “We continue to invest in our Porto manufacturing site, expanding capacity as well as broadening our Advanced packaging and test technology portfolio. This collaboration represents another milestone for both companies in enhancing supply chain resiliency for advanced products supporting Automotive & Industrial end markets.”

About Infineon

Infineon Technologies AG is a global semiconductor leader in power systems and IoT. Infineon drives decarbonization and digitalization with its products and solutions. The company has around 58,600 employees worldwide and generated revenue of about €16.3 billion in the 2023 fiscal year (ending 30 September). Infineon is listed on the Frankfurt Stock Exchange (ticker symbol: IFX) and in the USA on the OTCQX International over-the-counter market (ticker symbol: IFNNY). Further information is available at www.infineon.com.

About Amkor Technology, Inc.

Amkor Technology, Inc. is the world's largest US headquartered OSAT (outsourced semiconductor assembly and test) service provider. Since its founding in 1968, Amkor has pioneered the outsourcing of IC packaging and test services and is a strategic manufacturing partner for the world's leading semiconductor companies, foundries, and electronics OEMs. Amkor provides turnkey manufacturing services for the communication, automotive and industrial, computing, and consumer industries, including but not limited to smartphones, electric vehicles, data centers, artificial intelligence, and wearables. Amkor's operational base includes production facilities, research and development centers, and sales and support offices located in key electronics manufacturing regions in Asia, Europe, and the United States. For more information, visit amkor.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240408481167/en/

Infineon Technologies, AG

Andre Tauber

Head of Media Relations

+49 89 234 23888

andre.tauber@infineon.com

Amkor Technology, Inc.

Jennifer Jue

Vice President, Investor Relations and Finance

+1-480-786-7594

jennifer.jue@amkor.com

Christina Parsons

Director, Marketing Communications

+1-480-786-7823

christina.parsons@amkor.com

Source: Amkor Technology, Inc.

FAQ

What is the partnership between Infineon Technologies AG and Amkor Technology, Inc. about?

The partnership aims to strengthen the outsourced backend manufacturing footprint in Europe by establishing a packaging and test center at Amkor's manufacturing site in Porto.

When are the operations expected to commence?

Operations are expected to begin in the first half of 2025.

How does the partnership contribute to the semiconductor supply chain resilience?

The partnership enhances supply chain resilience, particularly for automotive customers, by increasing geographical resilience and supply security.

What role will Infineon Technologies AG and Amkor Technology, Inc. play in the partnership?

Amkor will expand facilities in Porto and run the production line, while Infineon will provide an onsite team with engineering and development support.

What are the benefits of the partnership for both companies?

The partnership enhances supply chain resiliency for advanced products supporting Automotive & Industrial end markets and strengthens Europe's importance as a semiconductor manufacturing location.