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While TSMC US operations are attracting numerous American clients, it remains an expensive endeavor, according to AMD’s CEO Lisa Su.
Getting Chips from TSMC US is a Costly Venture for Big Tech, but They Have No Other Choice For Now
TSMC has rapidly expanded in America, a move catalyzed by the Trump administration. Despite significant demand, producing chips in the U.S. costs 20% more than in Taiwan, as revealed by AMD’s CEO Lisa Su during an AI event in Washington (via Bloomberg).
Prior to TSMC’s expansion, American chip production was negligible, with no firm capable of producing advanced nodes domestically aside from Intel. However, TSMC has initiated this process through their Arizona facility and plans to scale up further, though the business remains expensive. As a result, clients like AMD and NVIDIA must pay 5% to 20% more for chips produced in the U.S.
Several factors contribute to the high costs of producing in America, including labor expenses, higher equipment importation fees, and the complexity of the chip supply chain. Despite these challenges, companies are still willing to source chips from TSMC US due to the full production lines in Taiwan and the alternative being even more expensive nodes from Arizona.
AMD is one of TSMC’s major customers in the U.S., with early orders for 4nm chips at their Arizona facility and plans to move to 2nm, particularly for EPYC Venice data center CPUs. Su expects AI chip demand to remain strong, with partners placing unprecedented orders, leading her to forecast a $500 billion total accelerator market valuation within five years.
📚 Reading Comprehension Quiz
According to AMD’s CEO Lisa Su, producing chips in the U.S. through TSMC costs how much more than in Taiwan?
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