In a significant update for the semiconductor industry, Advanced Micro Devices (NASDAQ:AMD) CEO Lisa Su stated that chips produced for AMD by Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) in Arizona are more expensive than those made in Taiwan.
At an AI-focused event in Washington on Wednesday, Su noted that the U.S.-manufactured chips cost between 5% and 20% more. For context, the U.S. government actively pushed the Taiwanese chipmaker to expand its advanced chip production on American soil rather than in Taiwan.
Citing national security and supply chain resilience, the Trump and Biden administrations urged Taiwan Semiconductor to migrate critical manufacturing capabilities, including advanced chip packaging, to the U.S.
Also Read: AMD Flags $800 Million Risk From New US Chip Export Rules As China Tariffs Add Pressure
In response, Taiwan Semiconductor invested over $65 billion in its Arizona fabs. It is considering up to $100 billion in U.S. chip manufacturing projects over the next four years to support America’s semiconductor leadership.
Despite the increased cost, Su underscored the strategic value of this investment in an interview with Bloomberg Television, emphasizing that it significantly strengthens AMD’s chip supply chain. AMD anticipates receiving its first batch of chips from TSMC’s Arizona facility by the end of this year.
Su also mentioned that Taiwan Semiconductor’s Arizona plant has already achieved yields comparable to those of its factories in Taiwan, meaning the number of usable chips per production run is on par.
The event where Su spoke was the Hill and Valley Forum, a gathering hosted by the All-In Podcast team, tech leaders, and lawmakers. President Donald Trump and other administration officials attended to promote their newly unveiled AI Action Plan.
This comprehensive plan, introduced by the White House on Wednesday under Trump’s directive, aims to boost U.S. innovation, enhance AI infrastructure, and solidify America’s global leadership in artificial intelligence. Su expressed strong support for the government’s focus on AI and commended the practical approach of the administration’s action plan.
In related news concerning the semiconductor market, AMD and its main competitor, Nvidia (NASDAQ:NVDA), recently saw some easing of U.S. export restrictions on AI accelerators shipped to China. However, Su noted that uncertainties persist regarding the number of licenses that will be granted and the duration for which companies will be permitted to continue shipments to China, which remains a crucial market for semiconductors.
Su concluded her remarks by highlighting the strong ongoing demand for AI chips and pointing to large-scale investments from OpenAI’s Sam Altman and xAI’s Elon Musk.
Year-to-date, AMD stock has gained over 31%, while TSM has risen 22%. The PHLX Semiconductor Index, which includes both companies, has seen a gain of over 13%.
Price Actions: AMD stock is trading higher by 1.29% to $160.70 premarket at last check Thursday. TSM is up 0.47%.
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