TSMC is rapidly expanding its local manufacturing facility in the US market. It recently announced its plan to open a third chip manufacturing plant in the region. However, AMD CEO Lisa Su says that exporting chips from the US is very expensive. She further details the complications involved and their impact on the progress of artificial intelligence (AI) in the market.
TSMC’s US-manufactured chip costs 20% more than overseas
Due to the push from American President Donald Trump, the TSMC has set up its manufacturing plant in Arizona. The administration also made it clear that it does not want the import of chips from Taiwan to happen. This further pushed the TSMC to invest in the country.
However, AMD’s CEO Lisa Su recently said in an AI event that took place in Washington that “TSMC’s US-manufactured chip costs 20% higher than what was already available in Taiwan.”
AMD is one of the largest consumers of TSMC’s chipsets. In fact, it was among the first ones to order TSMC’s 4nm node. The CEO later adds that, though the costs are on the expensive side, the demand for AI chips is not going to slow down soon. She emphasises that the partner firms are placing chip orders are a rapid pace and that the market may cross $500 billion in valuation in the next five years.
Expensive Labour and import costs are the main reasons behind the high chip cost
There are several reasons why the same TSMC chip manufactured in the US costs more than the one manufactured in Taiwan. Expensive labour costs and the costs associated with the import of parts and the setup of tech facilities are the primary ones.
However, since Taiwan’s semiconductor market is already populated enough, firms like AMD are ready to order from the US. Even if it means paying 5% or 20% higher costs. There’s no brand other than Intel and TSMC that produces mass-market targeted chipsets in the country.
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