Today, the new US Secretary of Commerce made statements that the construction of five new plants by TSMC in the country will not be subsidized in any way. At the same time, doing business of this kind in the US will cost TSMC more, which will cause an increase in prices for chip manufacturing services for AMD and Nvidia by about 15%.
Image source: GlobalFoundries
At least, these are the estimates shared by sources interviewed by Commercial Times. It is assumed that TSMC’s overall costs for producing chips in the US will be 30% higher than in Taiwan, but the company, for noble reasons (and geopolitical considerations), will take on half of the additional costs. It will transfer the remaining 15% of the increase in cost to the wallets of its customers, among whom will be American companies AMD and Nvidia.
AMD CEO Lisa Su commented on TSMC’s initiative to expand its network of factories in the US yesterday, explaining that AMD’s advanced chips would start rolling off the conveyor belt of TSMC’s first factory in Arizona before the end of this year. According to Taiwanese sources, Nvidia representatives responded to these events in a more abstract way, positively assessing the very possibility of further expanding the geography of production of their own products.
Taiwanese sources estimate that TSMC’s depreciation costs in the US will be 26% higher than in Taiwan, while labor costs will be 66% higher. Even if TSMC’s US plants are fully operational, local products will still be almost 30% more expensive to produce than similar Taiwanese products. Overall, some experts believe that the need to invest another $100 billion in chip production in the US will reduce TSMC’s profit margin this year by 2% to 3%. The company has not yet revised its long-term target of 53% downwards.