AMD CEO sees chips from TSMC's US plant costing 5%-20% more
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Re: AMD CEO sees chips from TSMC's US plant costing 5%-20% more
#2If 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.
Re: AMD CEO sees chips from TSMC's US plant costing 5%-20% more
#3The 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
Re: AMD CEO sees chips from TSMC's US plant costing 5%-20% more
#4The 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
The manufacturing cost is emphatically not only 1% of the total development cost. Particularly for GPUs, the high bandwidth memory and manufacturing costs are a significant portion of the product price.
Re: AMD CEO sees chips from TSMC's US plant costing 5%-20% more
#5The 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
The manufacturing cost is emphatically not only 1% of the total development cost. Particularly for GPUs, the high bandwidth memory and manufacturing costs are a significant portion of the product price.
> The manufacturing cost is emphatically not only 1% of the total development cost.
I have no idea what is the manufacturing cost of a 800 mm^2 die is, but I am sure it is lower than the development cost.
> Particularly for GPUs, the high bandwidth memory and manufacturing costs are a significant portion of the product price.
HBM is not manufactured by the GPU vendor, it is an off-the-shelf component that AMD buys like any other company can. Thus, the cost of HBM is tallied in the BOM and integration costs (interposer, packaging, etc).
Re: AMD CEO sees chips from TSMC's US plant costing 5%-20% more
#6If 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.
I wonder if that 20% is a floor or a ceiling too.
Like, as more of the supply chain is reshored will that continually increase cost because reshoring is intrinsically less efficient or will it decrease costs because the increased cost of just reshoring the fab part of the supply chain costs more due to less proximity and integration with the existing supply chain?
Re: AMD CEO sees chips from TSMC's US plant costing 5%-20% more
#7If 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.
I definitely agree, but the next challenge is how to support that long-term investment?
Businesses that rely on the chips will see an increase in cost; and that means passing the cost down to their customers (or having less to invest on their own R&D).
Re: AMD CEO sees chips from TSMC's US plant costing 5%-20% more
#8Here's a gift article link to the original Bloomberg source:
https://www.bloomberg.com/news/articles/2025-07-23/amd-ceo-s...
Re: AMD CEO sees chips from TSMC's US plant costing 5%-20% more
#9Aren't they shipping the chips back to Taiwan for packaging anyway?
Re: AMD CEO sees chips from TSMC's US plant costing 5%-20% more
#10The 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?