When developing new chips that will power the next generation of hardware, we must look at the manufacturing process/nodes used. Here TSMC has been the queen for years and companies like AMD, Apple, or NVIDIA and the latest graphics depend on it. TSMC must continue to expand its production and announced that it wants to produce its chips in the US in exchange for charging up to another 30% for these compared to the cost of manufacturing them in Taiwan.
The lithographic process used to manufacture the chips is very important since in general smaller the number of nanometers the higher the density, performance, and efficiency. Here we can say that Intel, Samsung, TSMC, and others such as GlobalFoundries are in charge of producing the wafers in the lowest number of nm possible and competing for which one offers the best performance. You could say that TSMC was the undisputed leader for years and thanks to him we can say that their AMD Ryzennews console or their Apple device keeps going further and further.
TSMC will produce chips in the US to charge another 30%
Despite its progress, TSMC could not launch the expected 3nm yet and Samsung could take advantage of the opportunity to overtake TSMC and steal customers. Despite this, TSMC remains the first choice for Apple’s caliber company and has already announced this would increase its production capacity outside its native country, Taiwan. However, products on US soil are more expensive and this is something the company has announced on several occasions.
TSMC has already started discussions with its customers about the orders and the price of chips produced in the United States. Now there are estimates on this, especially, on the nodes N4 and N5 from TSMCwhich will be 20-30% more expensive than in Taiwan. This means that the 4 and 5 nm nodes will be significantly more expensive and this is something that Americans will not like, but there is an alternative. The United States could end up developing its Arizona factory chips designed for government applications which would not have such a great price.
US and Japan will pay more for TSMC to maintain its 53% margin
Speaking of lower prices, we have the TSMC factory located in Japan where they only charge between 10 to 15% more than Taiwan. This is because the Japanese facilities located in Kumamoto focus on older nodes such as N28, N22, N16, and N12, that is. from 28 nm to 12 nm. The price increase of TSMC chips in both the United States and Japan is due to there high cost of building and running factories in these countries.
Thus, TSMC calculated the additional charge to meet its goal of maintaining a 53% gross profit margin. While in Japan they have already accepted these prices without problems, in the United States the price of TSMC chips continues to be negotiated. It is not yet known how much it will end up costing them, but what we do know is that the companies love it AMD began to trust Samsung Foundry to manufacture part of 4nm chips.