Semiconductor onshoring used to center on the front end (wafer fabrication). That focus is widening to advanced packaging (the back end). Now that AI-chip performance and supply hinge on the back end, both the US and Europe have begun to make securing domestic packaging capability a policy pillar.
For buyers, this means the supply-chain map is being redrawn by policy. Where each country builds back-end capacity ties directly to supply continuity and geopolitical risk a few years out. It is worth reading the US–EU policy race through primary sources.
US — $1.4 billion via CHIPS/NAPMP
In January 2025, the US Commerce Department finalized $1.4 billion for advanced packaging via the CHIPS NAPMP. It is not a one-off subsidy but a national program binding the domestic back-end ecosystem. In the breakdown, Natcast obtained $1.1 billion to operate the advanced packaging piloting facility (PPF), and Absolics, Applied Materials, and Arizona State University received a combined $300 million for advanced substrate research.
The materials and substrate base is also covered. Absolics builds a glass-core packaging ecosystem in Covington, Georgia with a $100 million direct award. It is designed to lift research, volume, and materials together.
Amkor — ~$2 billion in Arizona
A prime example where policy and corporate investment mesh is Amkor. Amkor secured up to $400 million in direct subsidies and $200 million in loan access under the CHIPS Act. Backed by this, it plans to invest ~$2 billion in an OSAT facility in Peoria, Arizona, employing about 2,000.
A site does not stand alone. Amkor collaborates with TSMC to build volume production of advanced packages for HPC, automotive, and communications, aiming to place the front end (TSMC) and back end (Amkor) in close proximity in the US. The US Commerce Department frames building domestic advanced-packaging capability as the top priority and key to CHIPS program success, putting back-end onshoring at the core of policy.
EU — the European Chips Act and Chips Act 2.0
Europe, too, explicitly incorporates the back end. The EU European Chips Act took effect on September 21, 2023 and explicitly targets strengthening advanced-chip design, manufacturing, and packaging capability. Beyond the front end, it aims to thicken the in-region supply chain including packaging, test, and assembly. The goal is clear: to double the EU's global semiconductor market share to 20% by 2030.
The pace does not slow. The European Commission proposed a Chips Act 2.0 in June 2026, stepping further toward reducing strategic dependencies. Like the US NAPMP, Europe seeks to boost "self-sufficiency including the back end" through policy.
How to read the policy race
The geopolitics of advanced packaging: US and EU
01
US: CHIPS/NAPMP
$1.4B finalized for advanced packaging (Natcast PPF $1.1B, substrate research $300M, etc.). A national program binding the domestic back-end ecosystem.
02
US: Amkor×TSMC
Amkor secured up to $400M subsidies + $200M loans, investing ~$2B in Arizona for ~2,000 jobs. Collaborates with TSMC to place front and back end in close US proximity.
03
EU: European Chips Act
In force Sept 2023, explicitly covering design–packaging. Targets a 20% global share by 2030. Proposed a Chips Act 2.0 in June 2026 to reduce dependencies.
04
Implication for buyers
The location of back-end capacity is redrawn by policy. Each program's progress informs assessment of geographic diversification and geopolitical risk.
Business impact and checkpoints
From a procurement and investment view: (1) whether your back-end sourcing is concentrated in one region, and whether US/EU onshoring adds substitution/diversification options; (2) how sites where the front and back end sit close (as with Amkor×TSMC) change lead times and supply continuity; and (3) when the capacity that policy (NAPMP / European Chips Act) targets actually materializes as volume production. The geopolitics of the back end is not merely a policy story — it is worth tracking as a long-term shift that redraws the supply-chain map over several years.
