AMD CEO says U.S.-made TSMC chips are more expensive, but worth it — costs 'more than 5% but less than 20%' higher than Taiwan-sourced alternative

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The U.S.'s push for domestic chip manufacturing is bearing fruit.

AMD
(Image credit: AMD)

AMD CEO Lia Su said that chips made in TSMC’s Arizona facility are more expensive than those made in a comparable facility in Taiwan. Dr. Su said that U.S.-made chips cost ‘more than 5% but less than 20%’ higher, and she added during an interview with Bloomberg that these are costs that the company must shoulder to have a more resilient supply chain.

“I think the economics of it are we have to consider the resiliency of the supply chain, I think we learned that during the pandemic — the idea that you think about your supply chains not just by the lowest cost, but also about reliability, about resiliency, and all those things. I think that’s how we’re thinking about U.S. manufacturing,” the CEO said to Bloomberg’s Ed Ludlow. “And yes, it will be a little bit more expensive — frankly, some of the work that has been done to encourage semiconductor investment has been helpful. But when you really average it across everything else that you need to build this computing infrastructure, I think it’s a very good investment for us to make to assure that we have American manufacturing and resiliency.”

TSMC Arizona has already reportedly started manufacturing 4nm chips earlier this year, with yield and quality said to be comparable to that of its factories in its home country of Taiwan. And while many companies fear that moving their manufacturing to the U.S. would cost significantly more, some experts estimate that wafer production at the Arizona site is only about 10% more expensive compared to Taiwan. Despite that, the company says that its customers are willing to pay a higher price, with production already sold out until late 2027.

Dr. Su said that the company expects to start receiving silicon from TSMC Arizona by the end of the year, making it one of the first tech giants after Apple to receive ‘made in America’ chips. AMD’s bigger rival, Nvidia, is also sourcing some of its Blackwell system production from the site. All these developments are a win for the U.S., as its push to bring back domestic semiconductor manufacturing is beginning to bear fruit, despite the slightly higher costs.

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Jowi Morales
Jowi Morales
Contributing Writer

Jowi Morales is a tech enthusiast with years of experience working in the industry. He’s been writing with several tech publications since 2021, where he’s been interested in tech hardware and consumer electronics.

40 Comments Comment from the forums
  • TechieTwo
    IMO a 10% price increase for U.S. produced products isn't unreasonable. Some companies however like to exploit customers by increasing prices 25+% which will likely cost them customers.
    Reply
  • King_V
    Another thing to consider - in the event of a supply-chain disruption, that higher price becomes a lower price relative to the prices that emerge via scarcity.

    Having multiple sources is a smart bet.
    Reply
  • A Stoner
    Where do we get wafers? Where do we get the chemicals? The machines they are made on are imported. The only aspect that is going to be American made is that the final processing happens in the USA. Kind of like many cars. Everything is sourced overseas, but assembled here...

    We really need to get rid of the regulations that prevent America from doing the from ground to grave of these things.
    Reply
  • FunSurfer
    I will pay more for a Zen 6 CPU, according to the specs rumors, it will be worth it.
    Reply
  • vanadiel007
    It's interesting. Look at car plants: Ford, GMC, they close car plants here, move production to Mexico and your car costs the same...

    So maybe it's not a bad idea to move everything back to North America and make your car still cost the same.

    And I think they can do this with other items also, like processors. Bring them back, keep the price the same and lower your profits a bit.
    Reply
  • A Stoner
    vanadiel007 said:
    It's interesting. Look at car plants: Ford, GMC, they close car plants here, move production to Mexico and your car costs the same...

    So maybe it's not a bad idea to move everything back to North America and make your car still cost the same.

    And I think they can do this with other items also, like processors. Bring them back, keep the price the same and lower your profits a bit.
    The reason they move the production and the cost remains the same is they try to absorb the cost of doing it in America until it is unbearable, and in order to keep prices low, they have to move to lower cost places. You can look at their profits and see they are not making massive amounts of money off their expenses. The simple math required you learn in grade school.
    Reply
  • hotaru251
    U.S.-made chips cost ‘more than 5% but less than 20%’ higher, and she added during an interview with Bloomberg that these are costs that the company must shoulder to have a more resilient supply chain.

    a 15% difference is a BIG difference...

    Also X to doubt the company will shoulder the cost increase it will 100% be consumer.
    Reply
  • Elusive Ruse
    Worth it, I’d rather pay higher for a product knowing it wasn’t made somewhere with horrible working conditions than save a few bucks.
    Reply
  • svavar79
    It should be emphasised that the plant producing those chips was built during the Biden administration and supported by grants and loans from the CHIPS and Science Act he signed in 2022.
    Reply
  • Notton
    A Stoner said:
    Where do we get wafers? Where do we get the chemicals? The machines they are made on are imported. The only aspect that is going to be American made is that the final processing happens in the USA. Kind of like many cars. Everything is sourced overseas, but assembled here...

    We really need to get rid of the regulations that prevent America from doing the from ground to grave of these things.
    The high purity ingots and wafers come from Japan. AFAIK Japan produces something like 80~95% of the high purity ingots and wafers.

    The chemicals are produced locally, near the fabs because the chemicals (eg high purity Hexafloride) are highly volatile and have a shelf life measured in days. Hexafloride can also be used in nuclear weapon making, so it has export controls and it's not something you can easily buy from another country. Nor would you want to because said short shelf life and purity requirements.
    Reply