TSMC's US factory-made chips to carry a higher price tag according to AMD's CEO Su
In a recent interview with Bloomberg Television, AMD CEO Lisa Su discussed the benefits of diversifying chip supply, emphasizing the company's strategy to expand its manufacturing footprint, particularly through TSMC's new fabrication plant in Arizona.
The event, hosted by the All-In podcast team and the Hill and Valley Forum, took place at an artificial intelligence (AI) event in Washington, where US President Donald Trump and other administration officials were present to discuss the rollout of their "AI action plan."
Su highlighted the importance of considering resiliency in the supply chain, a lesson learned from the pandemic. She mentioned that chips produced in the US at TSMC’s Arizona fab cost between 5% and 20% more than those made in Taiwan. However, she emphasized that this additional expense is a "very good investment" to ensure supply chain resiliency and reduce vulnerability to disruptions like those experienced during the COVID-19 pandemic.
The Arizona plant’s output already meets quality and yield standards comparable to TSMC’s Taiwanese fabs, supporting AMD’s goal of reliable, diversified chip sourcing. This diversification not only mitigates risks from geopolitical tensions and global logistics challenges but also aligns with broader strategic shifts in the semiconductor industry toward US manufacturing investments, as seen in TSMC’s $100 billion commitment to US fabs.
AMD, Nvidia’s nearest rival in the market for AI accelerators, and Nvidia Corp have recently gained a reprieve on restrictions imposed on shipments of some types of AI accelerators to China. However, the specifics of the policy going forward, including how many licenses would be granted and how long the companies would be allowed to ship the chips to China, remain unclear.
Su stated that the policy going forward needs to be balanced, allowing shipments to US allies to ensure the country’s technology remains foundational to AI systems everywhere. US Secretary of Commerce, Lutnick, also stated that the administration is comfortable with allies buying a significant number of chips and having a large cluster.
It is still not clear how the reprieve on restrictions will affect the cost of AMD's chips from TSMC's Arizona facilities. The event did not provide further information on this matter.
In summary, AMD’s chip diversification through US-based production entails a trade-off of higher costs for improved supply chain stability. This approach aims to enhance the company’s long-term operational security and scalability, especially in the AI and high-performance computing segments where AMD is aggressively expanding.
- As the semiconductor industry shifts towards US manufacturing investments, AMD's strategy of diversifying chip supply by producing chips in the US at TSMC’s Arizona fab aligns with this trend.
- In discussions about the reprieve on restrictions imposed on shipments of some types of AI accelerators to China, both Lisa Su and US Secretary of Commerce, Lutnick, stressed the importance of maintaining a balanced policy, ensuring that US technology remains foundational to AI systems and permitting significant chip purchases by US allies.
