AMD CEO Sees Chips From TSMC's US Plant Costing 5%-20% More (msn.com) 40
AMD CEO Lisa Su said that chips produced at TSMC's new Arizona plant will cost 5-20% more than those made in Taiwan, but emphasized that the premium is worth it for supply chain resilience. Bloomberg reports: AMD expects its first chips from TSMC's Arizona facilities by the end of the year, Su said. The extra expense is worth it because the company is diversifying the crucial supply of chips, Su said in an interview with Bloomberg Television following her onstage appearance. That will make the industry less prone to the type of disruptions experienced during the pandemic. "We have to consider resiliency in the supply chain," she said. "We learned that in the pandemic."
TSMC's new Arizona plant is already comparable with those in Taiwan when it comes to the measure of yield -- the amount of good chips a production run produces per batch -- Su told the audience at the forum.
TSMC's new Arizona plant is already comparable with those in Taiwan when it comes to the measure of yield -- the amount of good chips a production run produces per batch -- Su told the audience at the forum.
Didn't say why (Score:2)
...I suspect higher wages and cost of living are part of the difference.
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Higher wages, higher taxes, higher insurance costs, there are many possibilities, and most likely, all apply.
Re:Didn't say why (Score:4, Interesting)
Also didn't say that the PDK for the same process on the two fabs won't be identical.
Close, but you you won't be able to run the same design on either fab at whim, but have to pick either the TW or the USA fab at design start.
Freescale had this issue with their TSMC/Austin dual sourced processes back in the day. And everyone wanted to pick the TSMC fab because it was cheaper.
Labor is approx 10% of chip cost (Score:2)
...I suspect higher wages and cost of living are part of the difference.
Given that labor is 10% of the cost of making a chip, I will wager it's efficiency & skill, not cost of living. Taiwan is cheaper, but it's not the 3rd world. Building chips is highly specialized and requires a lot of skill. Based on reports I've read, there's a steep learning curve and training the staff and getting the workflows optimized takes time...so the first batch always costs more than the 1000th batch. This is well known in manufacturing...whether you're building simple things like screws
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Learning how to do chips isn't difficult. At a previous job, it was expected that Linux admins knew Verilog and VHDL, as well as layouts, floorplans, and getting Linux to do first light in a Palladium simulator.
If I can do this, and I'm dumb as a post, then I'm sure anyone on Slashdot can do this stuff easily. Of course, it will take training to handle trolleys, clean rooms and the EUV process... but none of this is impossible.
The entire stuff about "foreign being cheaper" is just bullshit brought on by c
Pretext for price hikes? (Score:4, Informative)
Sounds like she's buttering us up for upcoming price hikes.
AMD stocks are doing well so I'm not mad.
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Re:Pretext for price hikes? (Score:4, Insightful)
If they could make them as cheaply as in Taiwan, they'd have been doing so all along, and saving the shipping costs.
You can't accuse them of acting from greed while simultaneously accusing them of acting against greed.
Re: Pretext for price hikes? (Score:5, Insightful)
Everything involved with the U.S.-based Chip Fab costs more in America than it does in Taiwan, surely you didn't expect a Chip fab in the U.S. paying US taxes and U.S. wages would be cheaper than Taiwan, did you?
Let's not forget, chips made on U.S. soil are (obviously) exempt from U.S. tariffs, and much cheaper shipping charges than they were paying from Taiwan to U.S.
Very, very few items can be manufactured in the U.S. at a lower cost than in most developing world nations.
But yeah, "Whaa! My $3,500 gaming rig will now. OST $3,700! The horror!"
Re: Pretext for price hikes? (Score:4, Funny)
I was told the other countries would pay the tariffs!
Re: Pretext for price hikes? (Score:2)
Are shipping charges going to be much less in the US? It surely it depends on the destination and where itâ(TM)s coming from. Sea is much much cheaper than land: maybe a factor of four.
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Shipping by see for something like a chip is effectively free.
Heck, look at the travel of something as cheap as canned fruit.
Shipping by see is amazingly inexpensive.
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Just like (Score:5, Interesting)
The cost of steel is going up because of tariffs [dnyuz.com].
The cost of tomatoes is going up because of tariffs [time.com].
The cost of computer chips are going up because of tariffs.
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The current tariff on Taiwan is 10%.
Trump is threatening 32%.
Shifting AMD's production to TSMC's Arizona fab looks like a smart move by Ms. Su.
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Sure but that doesn't in any way invalidate the point of the previous poster. Tariffs (taxes) are driving up costs arbitrarily. They may have the desired effect to promote American manufacturing, but they certainly won't lower costs. No matter how you cut it is is some inflation. Maybe it's good, maybe it's bad.
And your point is??? (Score:3)
No one is going to be buying chips from TSMCâ(TM)s Taiwan plant when China takes Taiwan in 2027. All those military drills China does in the straits are for a purpose you know. And when that happens that fancy UV lithography machine gets bombed out of existsnce by the U.S.
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China won't get the UV lithography machines, but will get a lot of smart Taiwanese engineers with experience in UV fabs.
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Sadly, if Jinpingstan is allowed to attack independent democratic Taiwan, they only smart and underpaid Taiwanese engineers they'll be getting will be the dead ones on the beaches of Xinzhu, Taizhong and Tainan.
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I doubt many of those engineers will just sit around. They're either going to be in the military fighting (and likely killed), or they will flee the warzone and claim asylum somewhere else.
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Or they'll end up in the back, designing drones for the front.
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No one will buy chips at all. Taiwan already said they have a plan to destroy these factories if it looked like a Chinese invasion was going to succeed.
Chips with no ships (Score:1)
Besides all the metal gear tier bullshit of politics, there's the simple fact that, assuming AMD can assemble it in the US, they won't have to pay for the shipping of the components to the US.
I bet that does lower the total cost a bit.
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They probably already have to do it with the chips they import from taiwan
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What do you think the cost of a shipping container full of CPUs is, versus what it's worth. Shipping is a rounding error when talking about chips.
Re:Chips with no ships (Score:4, Informative)
20ft container TWKHH to USSFO is $4k. How many chips do you think fit in one?
Re: Chips with no ships (Score:2)
Definitely more than 3
The missing detail is the split percentage (Score:5, Insightful)
I've played this dance in other industries.
They will buy just enough from Arizona to keep it viable and show diversification, while buying most of it from Taiwan.
Arizona will probably be running a few batches a week, which keeps the processes in place and ensures that the knowledge is maintained and it is a viable source.
This might be 5% (made up number), 95% remains with Taiwan. The higher price impact is minimised, impacts on market etc. They might even be able to sell most of them as premium US products for defence and friends, or into the general US market to avoid tariffs.
It provides the safety net. If something happens they can relatively easily turn to knob and rapidly shift more production to Arizona because the initial set up work has all been done. But until then they will be minimizing quantity and maximising headlines.
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"If something happens" [dramatic pause, raised eyebrow]
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Yes, at the same time, they will also jack the price of their CPUs up 30%. Maybe 5% is due to having to run another fab, but the real reason is prices are going up, so jack up the price anyways because why the hell not. You're going to blame tariffs for prices increasing, so what's the harm in a little more margin?
Plus, AMD is in a really good spot right now, so they can justify a price premium over Chipzilla.
The opposite of efficiency is redundancy (Score:1)
Whether you choose to view "redundant" as a synonym for "inefficient" or for "resilient" is entirely up to you.
But as a general rule, cheap shit breaks more easily and stuff that don't break so easily tends to cost more up front.
Less than I had expected (Score:2)
This is actually less than expected. Low enough that I think this is too optimistic.
Then again, the cost is not so much labor, but energy, raw material, and land use. I wouldn't be surprised if cost of property and energy is actually comparable between Taiwan and Arizona, so there's only the extra shipping and a bit higher salary for a few workers.