- AMD’s CEO stated that chips made in TSMC’s US factories will be more expensive
- Lisa SU says they could be 5% to 20% more expensive than chips produced in Taiwan
- SU claims the cost is worth it with regard to diversifying the supply chain
AMD CEO has admitted that the company’s chips will be a good more expensive when produced in TSMC’s factories in the US (as opposed to Taiwan).
Bloomberg reports that it will be more expensive to buy chips from TSMC’s new Arizona system than its Taiwan factories. The TSMC is the chip producer that AMD uses to manufacture most of its processors and GPUs, and AMD is set to start receiving chips from the Arizona plant by the end of 2025).
At an AI event, CEO Lisa SU said US chips will be “more than 5%, but less than 20%” more expensive compared to “similar” parts produced in Taiwan. The CEO also observed that the yield in the US plant can be compared to TSMC’s Taiwanese facilities. (The yield is the percentage of chips that cause the character to be used in a finished product-not every piece of silicon does, and chips in this category are often recycled to lower-level hardware).
In an interview with Bloomberg, who followed the event, SU claimed that any extra expense was worth in diversifying where AMD outsourced its production. CEO said, “We need to consider elasticity in the supply chain. We learned it in the pandemic.”
SU also emphasized that the demand for AI chips, no matter where they are produced, do not go anywhere and remain massive – which is not news for anyone, of course.
Analysis: It’s still early days for TSMC USA
While yields can be the same (or we are told), it is not that SU does not mention that TSMC’s most advanced processes are exclusive to its production facilities in Taiwan. Arizona goes only as far as the N4 node, which is 4nm-Mens The advanced production process for TSMC now is 2NM.
In the end, however, the plan is to produce the more advanced products in the US – the investment in Arizona is, after all, a huge plan – but for now it is simply about adding diversity that SU indicates.
Still, all the pieces of the diversity puzzle have not yet been in place yet, at least according to the recent reports that notice that AMD still has to send some US-made chips back to Taiwan to quit (if they need advanced packaging used).
The plan is that it can eventually happen in the United States – but so far there is apparently this clumsy and rather impractical solution in place as part of the haste of getting more chips out the door (to meet AI demand, which as mentioned is huge).
This may be one of the reasons why costs can be inflated with potentially higher costs for being based in the United States in the first place (such as labor, perhaps).
SU’s estimate is quite far -reaching here, and a pricing of 5% to 20% is a broad gorge. The former seems relatively trivial, the latter represents a much less tasty hike – beating 20% on the cost of a typical Ryzen Work Horse CPU would put $ 50 on top or so (goes by MSRP for Ryzen 9600X, which admittedly sells for a lot cheaper now).
Okay, so you can’t boil this scenario down to this result – there are many more factors that need to be considered here, including SU’s estimate is pretty guard – but the higher end of the scale given to the potential cost increase is something about, for sure.
As it is the fact that this is not only a rumor flowing down from an anonymous source somewhere in the supply chain, but that it itself comes from the CEO.
