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
If your number is correct.
Power consumption isn't an issue if it can be generated cleanly, like nuclear or geothermal.
"The increased expenses stem from higher tariffs and transportation costs associated with importing necessary materials from Taiwan."
Their supply chain is not setup in the US yet. Once it is, stuff should cost similar to the stuff in Taiwan.Intel is having engineering challenges not supply chain issues."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."
There is more demand than capacity so there will be buyers even at higher prices. It will definitely not sit idle.
TAIPEI, Nov 7 (Reuters) - Taiwan will help companies relocate production from China given the likely large impact from tariffs that incoming U.S. President Donald Trump has promised to impose on the country, Economy Minister Kuo Jyh-huei said on Thursday.
Also the 30 year old Samsung Chip plant in Austin TX runs 24/7/365 with locally sourced materials.
The new Samsung Factory in Taylor TX is completed but unopened due to shortage of customers and a supply chain for Advanced chips that cannot be made in Austin.
Samsung in Korea is also in trouble due to poor yields of it's 3nm and 2nm chips
TSMC employees are paid much lower with fewer benefits in Taiwan compared to those with the same skill sets at TSMC in Phoenix AZ.The Taiwan government is the largest shareholder of TSMC so it makes a lot of the discissions.
Anyways, if these higher prices ever go to Europe and our CPUs/GPUs, its all over. They already overprice stuff here big time cus of the taxes and shipping. If this also somehow transfers here... ho boy. Owning computer stuff will be a thing of the past for many, at least newer stuff. Second hand market is a whole other story. Im tired of Jiz laptops :D