Nvidia (NVDA, Financials), the semiconductor company that designs graphics processors and artificial intelligence computing systems, signed a multi-year agreement with Amkor Technology valued at $1.5 billion to expand advanced chip packaging and testing capacity in the United States.
Under the agreement, Nvidia will make a prepayment to support the expansion of Amkor's U.S. operations, including capacity in Arizona.
The companies will also jointly develop packaging and testing technologies for Nvidia's AI and accelerated-computing platforms. The work will focus on integrating different types of chips into a single package, a key requirement for advanced data center systems.
Amkor already provides packaging services for parts of Nvidia's product portfolio, including data center processors. The expanded agreement is intended to bring additional packaging technologies to market as demand for AI infrastructure continues to rise.
The deal also strengthens Amkor's role in the U.S. semiconductor supply chain. In June, the company entered a 10-year partnership with Taiwan Semiconductor Manufacturing to expand domestic packaging capabilities. Amkor also works with Advanced Micro Devices.
Amkor shares rose 17% in extended trading after the announcement.
Investors will now watch how quickly the companies add capacity and whether U.S.-based packaging can ease supply constraints for advanced AI systems.