TSMC Arizona Plant Operations Will Reportedly Cost 30% More Than Taiwan Sites

[AleksandarK]

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.



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[katzi]

Ohboy, guess who'll be paying for That.

 

[kondamin]

That’s what you get for peppering them all over the country instead of making one big place where they are concentrated together

 

[clopezi]

Obviously, workers cost more than modern slaves.

That’s what you get for peppering them all over the country instead of making one big place where they are concentrated together

All places deserves prosperity

 

[kondamin]

Obviously, workers cost more than modern slaves.

It’s not about wages, a lot is automated. it’s because in small Taiwan everything is right next to one and other.
in the us best case you need to ship it across a nation the size of a continent or over an ocean

 

[3valatzy]

It’s not about wages, a lot is automated. it’s because in small Taiwan everything is right next to one and other.
in the us best case you need to ship it across a nation the size of a continent or over an ocean

In the US everything is more expensive - the labour, the electricity, the water, all materials.
A lot is automated, but still thousands of workers have to be employed.

 

[kondamin]

All places deserves prosperity

that idea is making The planet inhospitable for life at break neck speed by inefficiency and wastage.
people can move.

 

[erocker]

That’s what you get for peppering them all over the country instead of making one big place where they are concentrated together

Doesn't matter what part of the country when the resources needed to be imported are under tariffs. That's where the costs are coming from. Logistics of transportation within the US aren't a problem.

 

[3valatzy]

Logistics of transportation within the US aren't a problem.

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.

 

[katzi]

Doesn't matter what part of the country when the resources needed to be imported are under tariffs. That's where the costs are coming from. Logistics of transportation within the US aren't a problem.

Have you *Seen* logistics in the US?

What a Shitshow.

 

[Daven]

I wonder where Intel gets production materials for its US fab facilities.

 

[john_]

That will translate to 30% price increase for ALL TSMC products.

 

[usiname]

I wonder where Intel gets production materials for its US fab facilities.

Maybe this is the reason for the shitty intel's fabs, they are in US, just like GloFo and more minor semiconductor manufacturers

 

[Wirko]

I wonder where Intel gets production materials for its US fab facilities.

At least some chemicals are from Japan exclusively.

that idea is making The planet inhospitable for life at break neck speed by inefficiency and wastage.

TSMC's wafer manufacturing capacity exceeded 17 million 12-inch equivalent wafers in 2024. - Statista
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.

 

[freeagent]

Where I live we make our own power, and supply some states with it. Power is not a problem here.

If we were to hoard all the power we send down south, Canada would be a real powerhouse, literally

 

[bonehead123]

Sooooo, to summarize:

Get ready for MASSIVE price increases for anything that contains chips made by TSMC

'nuff said....

 

[AnotherReader]

At least some chemicals are from Japan exclusively.


TSMC's wafer manufacturing capacity exceeded 17 million 12-inch equivalent wafers in 2024. - Statista
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.

A lot of TSMC's output is on older fabs; another large percentage is devoted for smartphones. Both applications will be typically low power so while the increasing power consumption of logic is bad, it isn't as bad as 1 W per mm^2 multiplied by TSMC's wafer output in mm^2.

 

[GodisanAtheist]

Our profit indexes and cost ratios are going to kill us all.

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.

 

[evernessince]

If the cost increase really is due to a lack of certain goods in the US market required to operate the fab, it leaves the door open to reduce costs by addressing these shortcomings.

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.

View attachment 377814

This is true but also not the reason railway accidents are up. Railway accidents are up because, like many things in the US, deregulation has allowed companies to cut personnel on trains to a bare minimum in addition to having an unsafe number of cars per engine.

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.

 

[chrcoluk]

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.

View attachment 377814

Yeah I think you have managed to somehow have a worse railway system than ourselves.

 

[Divide Overflow]

Diversifying chip plant locations was a primary goal here, NOT minimizing costs.
30% sounds like a pretty reasonable cost difference to reduce overseas dependency.

 

[maxfly]

No company is going to buy a product from Arizona at that kind of markup. Like the article says, they will be competing against themselves. If they don't immediately increase prices across the board to meet that 30%, the Arizona fab will very quickly sit idle. Unless the USG thinks they can single handedly keep them afloat.

 

[hat]

They can only charge what the market will bear, so says me with my 2600k (still). Profit margins on things are insane, even if costs are going up regarding labor, materials, logistics etc. Never forget how much wealth the top 1% control compared to the rest of us. Only the top 18% of Americans make $100k or more in a year, and the higher you go, the greater the disparity becomes. This is the reason things are expensive.

 

[Wirko]

What about wafer supply? As far as I know, wafers are supplied by a small number (=cartel) of mostly Japanese companies, which build their plants geographically close to chip fabs.

 

[erocker]

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 e

Have you *Seen* logistics in the US?

What a Shitshow.

I deal with it every day and our trucking industry is one of the best in the world. What shitshow are you talking about?

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.

View attachment 377814
You don't know US shipping. We're not Europe.