Taiwan Semiconductor Manufacturing Company (NYSE: TSM) and Amkor Technology (NASDAQ: AMKR) announced a 10-year agreement under which TSMC will procure advanced packaging and testing services from Amkor, with operations centered in Arizona.

The agreement establishes a framework for expanding advanced semiconductor packaging capacity in the United States. Both companies have existing facilities under development in Arizona — Amkor is building an advanced packaging and test campus, while TSMC is developing semiconductor fabrication facilities in the state.

"We are pleased to enter into this Agreement with our partner Amkor," said Kevin Zhang, senior vice president and deputy Co-COO of TSMC. "We have a long history of experience working with Amkor globally in advanced packaging, and we are confident that our collaboration in the United States will be successful as we look to enhance our capabilities to jointly serve our customers."

Kevin Engel, chief executive officer of Amkor Technology, said the agreement is intended to provide customers "a full U.S. supply chain from advanced silicon manufacturing to tested packaged devices."

The partnership is structured to increase regional packaging capacity and reduce time to market for end customers across multiple sectors.