AMD CEO sees chips from TSMC's US plant costing 5%-20% more

Here's a gift article link to the original Bloomberg source:

https://www.bloomberg.com/news/articles/2025-07-23/amd-ceo-s...

If that is the cost of keeping the value within the western economies, we should pay. Plain and simple. I'd even argue it's cheap.

What I really want to know, from someone who does know: Is Intel cooked? Like, will they be able to manufacture chips that compete with TSMC?

They used to be a crown-jewel of US tech. But it seems like every time I read the news, they are announcing a delay or shutting down some product.

A lot of people misunderstand why companies outsource to Asia. It’s not just about cost—it’s actually more so about manufacturing expertise.

Asia has a massive pool of highly skilled manufacturing talent, and that kind of deep expertise is something the U.S. is quickly forgetting.

So my question is: with TSMC building a fab in the U.S., are Americans actually getting retrained in real manufacturing skills? Or are they just being taught to push the buttons TSMC tells them to push?

I see the point being made here, and yeah 5%-20% extra for what amounts to insurance against geopolitics isn't too bad, but doesn't this all fall apart when China catches up?

That 5%-20% is worth it now because no one else can fabricate competing chips. In a competitive market, 5%-20% can be the difference between having the price edge or not. I understand why the USA wants TSMC to manufacture outside of Taiwan, but perhaps it makes sense to move it not the USA but, say, Mexico?

Chinese car companies seem to be slowly but surely rolling American car companies in international markets with great value at low prices. The move in this market evidently isn't to move manufacturing away from Mexico at a 5%-20% increase in price.

In the chip market there's less immediate competition, but I can only imagine it'll come. Hopefully economies of scale would have removed this extra 5%-20% by the time China catches up?

A 5-20% markup on CPUs isn't the worst thing, but those still need a mobo to socket into and as far as I'm aware we still don't have much capability on the availability of boards. Are there any companies that are spinning up board production, or even just broader consumer electronics in general (arduinos, pis, general controllers and the like)?

> “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,” [AMD CEO Lia Su] said to Bloomberg’s Ed Ludlow.

This almost sounds verbatim what U.S. Secretary of the Treasury Scott Bessent told Bloomberg yesterday, so take the headline phrase “worth it” in that context.

The article doesn’t say, but I assume these are SOTA AI chips? If so, it’s a huge deal that American can build them.

Another interesting point:

> AMD and larger rival Nvidia Corp. recently gained a reprieve on restrictions imposed on shipments of some types of artificial intelligence accelerators to China. It’s still not clear how many licenses will be granted — or how long the companies will be allowed to ship the chips to the country, the biggest market for semiconductors.

It sounds like they’re trying to give China some chips but not as many as American allied countries. I wonder if they’re trying to get China “addicted” to western AI chips to hurt Chinese chip manufacturing development?

So are they going to try and spread this extra cost to customers worldwide?

I'm fine with chips made in Taiwan.

5-20% more expensive? That's way cheaper than I expected. That's pretty good, especially for 4nm.

> “What I really like about the AI action plan is that it’s quite actionable,” [AMD's CEO] said.

I couldn't help but laugh. And they say software engineers are replaceable by AI.

Capital expenditures are the dominant cost for semi fabs. Labor is actually relatively small. For example, "just" a tester machine, which tests parts before final, cost $5-10M each, and there are usually rows of these machines as far as the eye can see.

The question is: what’s AMDs margin? 20% manufacturing cost maybe well below 1% of the total development cost. So, not a deal breaker at all.

It seems to me that long term having fabs in the IS is net positive for the economy: more jobs, more localized supply chains, more local expertise, etc etc

I run an AMD NeoCloud. People are extremely price sensitive and due to the competitive nature of the industry, I'll likely be the one absorbing this increased cost.

If they were worth it you'd already have been buying them. With that being said, glad to hear a CEO say "we have to consider the resiliency of the supply chain" because JIT as a manufacturing philosophy is revealing itself to be what it always was: exceedingly fragile, barely adequate when everything is working perfectly and subject to massive, multiplicative disruptions when everything is not working perfectly.

You can get much more then a 5%-20% higher price from the kind of customers which really care about US production (I mean like government, CIA, NSA, which also get stuff like AMD systems with hyper threading disabled or special treatment wrt. management units in a CPU etc. I don't mean people caring for the US, for that target group, from what I have seen over the years, I guess, 5% can work 20% is tricky).

Aren't they shipping the chips back to Taiwan for packaging anyway?

As a non-american...

i'd prefer taiwan over the US...

Honestly I thought they might be even more expensive than this 5%-20%, it's good to see that it's not a 100% more expensive. While it seems we've learned some lessons about supply chain resiliency, I'm sure there's a number that puts the brakes on this thing.

The article doesn’t say why the chips have a cost difference. The wafer cost of advanced nodes is ~$30k per wafer. Is the wafer cost different or is the yield different and hence the reason for the variance of 5-20%? All else being equal (same die size/design on same process) I suspect that a large part of the cost difference is yielded cost due to maturity of operations at the Arizona fab. Taiwan has had many years to optimize operations. You see this for any product initially when it moves to a new production site.

This is from the All in session? ;

https://youtu.be/9WkGNe27r_Q?si=w5BE2tZKdFcI6aC1&t=812

Doesn't this type of thing prove that we can just... start manufacturing things domestically if we really wanted to? Which would presumably be when it actually makes sense to do so? But it mostly doesn't right now, so we mostly don't.

There are certainly benefits to being able to make something down the block and quickly iterate. But that's a different thing from industrial scale production. And if we really wanted that benefit wouldn't we just... do it?

5%-20% sounds like a MUCH lower premium than I expected.

And yes, no matter what you think of America First (I'm not even American), that sounds very much worth it.

This is a crazy article. Its title is gonzo . She was clearly spitballing. All of Bloomberg is dumber by reading this title

The US cost of stationing forces, patrols, and readiness in the pacific is probably 20-40 billion USD per year. cut that huge subsidy and Taiwan ceases to exist within several years. 5%? we should really evaluate if we need a long term dependency on taiwan. It would probably be better to evacuate them all.

If that's all, that's a really good bargain.

A 20% premium for one of the pillars of a modern economy to both repatriate engineering knowledge as well as be significantly less threatenable by your primary geopolitical enemy would be money very well spent.

Of course the AMD CEO would say that, they need to remain in a positive light of the mob boss President otherwise they will be taxed and or sued.

You see it with Columbia university and that network television network that got sued

This gap is small enough to see a realistic prospect of a war in Taiwan.

Worth remembering that in the medium term, chip manufacturing will become so expensive only one leading edge provider will remain and they will require the entire world market to remain profitable.

Nothing but delusion. Time to throw a wrench into this party.

1. The estimates are never accurate; after subsidies dry up expect 50-200%.

2. I will buy used before I buy new to cut costs.

3. American manufacturing is trash; I will never buy GM/Ford/Chrysler/Tesla; no matter how much you try to force me to. Intel falls into this category. I'm supposed to just accept on faith that building a tsmc fab in the US is going to "just werk"? Nah.

4. I don't care if it's "Made in America"; what I care about is price to quality and performance ratio. Which as we all know the Americans have gave up on (ahem Ford and only manufacturing trucks, etc). Intel has been getting it's asshole rocked the past couple years and it has home field advantage.

5. I care what Linux runs; and if China and RISC-V take off and are lower price point I'll buy that before I spend anything on US "American made chips".

6. I don't care about "ccp bad"; fuck off with your propaganda. You realize Taiwan is an island state of China right? Seems like good idea to let them setup shop in US? Good job you played yourself.

7. The "rare earths" to make these chips come mostly from China. China will counter like they already have screwing over Micron and Intel (and soon tsmc).

8. Apple will mark up whole price; not just chip price. The consumer will pay for the entire shift of the supply chain not just the cost to manufacture. Even in best case of 5% your 2,000 laptop is now minimum 2,100; yea, the average American can afford that... People can't even afford to eat fast food anymore and some idiots in here think they can pay more for something they don't give a shit about? Lol

9. You first; just like with the idiots that bought Teslas (which are the lowest and worst in quality of all cars manufactured). Meanwhile I'm still driving my second car (Japanese btw) after having bought in 2019 (and the one before lasted 20 years).

10. This reeks of the anti Honda shit I would see during 2008 PvP of US auto industry because they failed to innovate. And guess what no propaganda saved them and they still can't compete in the market.

11. Intel is on life support, and tsmc is supposed to what...?

Like I said it's nothing but delusion.

It's funny that this is why "we can't build things here" and also why the world's two biggest powers are at a standoff:

5-20% more expensive prices for just one type of thing

Supposing TSMC has similar margin and cost structure for chips made in the US and Taiwan, what does a 5-20% price increase means in term of production cost?

Discussion from yesterday: https://news.ycombinator.com/item?id=44663074

This was always going to be the case. The question is whether this is still going to be true five or ten years down the line.

That seems like a reasonable price premium to pay for having given up fabbing in the US previously and now paying to catch up.

AMD never should have given up their fabs. Things that look like efficiency gains often increase your business risk.

Seems like a low price to pay for eliminating the risk to have your production facilities overrun by Chinese invaders.

That's quick. Didn't they only start building that factory two or three years ago?

US can simply put 20% tariffs on taiwan/chinese chips and this would be absorbed

AMD CEO sees chips from TSMC's US plant costing ]5,20[ % more (bloomberg.com)

there I fixed it.