AMD CEO Lisa Su: Sourcing AI Chips from TSMC’s U.S. Facilities Costs 20% More, Emphasizing Supply Chain Challenges in America

According to AMD’s CEO, Lisa Su, while TSMC’s operations in the United States are attracting considerable attention from American clients, the associated costs are significantly high.

TSMC’s US Chip Production: An Expensive Necessity for Big Tech

The rapid expansion of TSMC in the US, spurred by the previous administration’s push against foreign chip sourcing, has taken many industry observers by surprise. As a result of these initiatives, TSMC made substantial investments across the country. However, this expansion does not come without its financial repercussions. According to Lisa Su, chips produced in the US are 20% more costly compared to those manufactured in Taiwan. This insight was shared during a recent AI event in Washington, highlighting a pressing issue for the tech sector (via Bloomberg).

Prior to TSMC’s efforts, the American chip supply chain was barely functioning, with just Intel positioned to meet high-demand for advanced production. However, TSMC’s establishment of its Arizona facility heralded a new era. As operations ramp up, the costs associated with US production remain a concern. Clients like AMD and NVIDIA are now facing price hikes, with sourcing chips in the US increasing costs by 5% to 20%.

TSMC and AMD executives celebrate product launch in N2 NanoSheet Technology.

Several factors contribute to the high cost of US chip production, including elevated labor expenses, increased costs for importing equipment, and a still-maturing domestic supply chain. Despite these challenges, companies are compelled to source chips from TSMC in the US, primarily because production lines in Taiwan are at full capacity. Consequently, for major tech firms, the US option, though pricier, becomes a vital alternative.

AMD, a key customer of TSMC, has already placed early orders for 4nm chips from the Arizona facility and is aiming to advance to 2nm technology, specifically for its EPYC Venice data center CPUs. CEO Lisa Su points out that the demand for AI-driven chips continues to surge, with orders coming in at an extraordinary rate. She forecasts that the total market for accelerator technologies could soar to an astonishing $500 billion over the next five years.

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