Tuesday, December 31st 2024
TSMC Arizona Plant Operations Will Reportedly Cost 30% More Than Taiwan Sites
TSMC's new semiconductor manufacturing facility in Phoenix, Arizona, will face production costs approximately 30% higher than its Taiwan-based operations when it begins mass production in early 2025. The increased expenses stem from higher tariffs and transportation costs associated with importing necessary materials from Taiwan. The Arizona facility will start producing 10,000 12-inch wafers monthly using a 4 nm node, with plans to double output to 20,000 wafers at full capacity. Four major technology companies—Apple, NVIDIA, AMD, and Qualcomm—have committed to purchasing chips from the plant for their AI and high-performance computing needs. The 445-hectare facility highlights ongoing challenges in America's semiconductor industry. Despite the aim to strengthen domestic chip manufacturing, the plant must import materials from Taiwan to maintain production quality, revealing gaps in the US semiconductor supply chain.
This overseas dependency drives up operational costs significantly. While TSMC's investment marks an essential step in rebuilding domestic capacity, the substantial cost difference between US and Taiwanese production raises questions about long-term viability. TSMC has already begun trial production at the site and plans to expand operations with additional phases. The company's Phase 2 facility is completed, and equipment is being installed, while future expansions aim to produce 2 nm chips by 2028. However, unless the cost gap narrows, the higher production expenses could impact the plant's competitiveness in the global semiconductor market, even competing with its own Taiwanese facilities, where customers could decide to use Taiwanese fabs due to lower costs. Meanwhile, TSMC continues to expand its Taiwan operations, with plans to build new 2 nm facilities in Kaohsiung's Science Park starting next year.
Sources:
Yonhap, via ComputerBase
This overseas dependency drives up operational costs significantly. While TSMC's investment marks an essential step in rebuilding domestic capacity, the substantial cost difference between US and Taiwanese production raises questions about long-term viability. TSMC has already begun trial production at the site and plans to expand operations with additional phases. The company's Phase 2 facility is completed, and equipment is being installed, while future expansions aim to produce 2 nm chips by 2028. However, unless the cost gap narrows, the higher production expenses could impact the plant's competitiveness in the global semiconductor market, even competing with its own Taiwanese facilities, where customers could decide to use Taiwanese fabs due to lower costs. Meanwhile, TSMC continues to expand its Taiwan operations, with plans to build new 2 nm facilities in Kaohsiung's Science Park starting next year.
32 Comments on TSMC Arizona Plant Operations Will Reportedly Cost 30% More Than Taiwan Sites
Ohboy, guess who'll be paying for That.
in the us best case you need to ship it across a nation the size of a continent or over an ocean
A lot is automated, but still thousands of workers have to be employed.
people can move.
What a Shitshow.
A 300 mm wafer yields roughly between 50,000 and 60,000 mm², out of the total 70,700 mm² area.
Power density in logic chips of recent design, the kind that TSMC mostly produces, is around 1 W/mm².
Logic chips made by TSMC alone each year consume one terawatt of electric power when doing their job, memory/storage/cooling not included. If you're holding out hope for the planet, think of that.
If we were to hoard all the power we send down south, Canada would be a real powerhouse, literally :D
Get ready for MASSIVE price increases for anything that contains chips made by TSMC :(
'nuff said....
TSMC's Arizona fabs are the first step in making sure the national defense apparatus has a clean supply of chips and to ensure China doesn't just have the global economy by the balls when they decide to invade Taiwan (where TSMC will almost certainly scuttle all of their fab equipment if it looks like things are going south).
I don't have high hopes for the "efficiency clowns" of the next 4 years slaving us to tinpot dictators the world over in the name of efficiency (and lining their own pockets), but not everything can or should make money just to exist.
A lot of industries in the US are like this now, privatize the profits and socialize the costs. These trains are carrying dangerous highly volatile chemicals and the tracks are always located near low income areas.
The US could definitely stand to invest a lot more into it's infrastructure, not just to repair what exists but to add what doesn't. A bullet train connecting the coasts for example would be fantastic. Connecting the separate grids with higher voltage lines would enable energy to be more cheaply produced in areas when it can easily be generated to areas it cannot. For example, an area with high wind energy potential could sell to an area with none and because you are increasing the number of providers that could sell to any given area you drive down costs. It's a win win for consumers and manufacturers. Infrastructure has historically been a good investment with excellent returns.
30% sounds like a pretty reasonable cost difference to reduce overseas dependency.
I don't think so. Look at the US railways - they are gone now. No one invests in them, there are thousands of accidents on the US railways every year.
You don't know US shipping. We're not Europe.