TSMC always said that making chips in the US was more expensive than doing it in Taiwan. His Arizona plant denies it

Morris Chang is not infallible. No one is. This veteran Taiwanese engineer formed in the US is One of the most respected experts in the global semiconductor industry. After all, he founded TSMC at a historic moment, 1987, in which Taiwan occupied a very discreet position in the integrated circuit production market. His cunning is undeniable. After all, objectively has made very successful decisions at the head of TSMC.

However, their forecasts are not always accurate. And is that on several occasions He has pointed out publicly That the production costs of their plants located outside of Taiwan will double in the future, which will have a direct impact on the price of the chips. This increase is a consequence of the increase in the price of energy, of the cost derived from workers’ salaries and the impact that inflation is having on the price of essential raw materials.

Processing a wafer in Arizona costs TSMC less than 10% more than doing it in Taiwan

In mid -April 2024 CC Wei, the executive who at that time held the reins of TSMC, clarified Morris Chang’s statements anticipating that the increase in costs derived from the manufacture of integrated avant -garde circuits in the plants that the company has outside of Taiwan would be assumed by both TSMC and its customers: “If my client wants to manufacture in a specific area (outside of Taiwan) then definitely TSMC and the client himself will have to share the increase in costs (…) We are already discussing it with our customers.”

Chang and Wei’s statements have caused many analysts in the integrated circuit industry to follow the steps that this company has in Phoenix (Arizona) very closely. This avant -garde chips factory We were surprised in October 2024 When Rick Cassidy, the president of the TSMC American division, confirmed that its initial production performance had surpassed that of the comparable factories that TSMC has in Taiwan.

The performance of a lithographic node is crucial because it reflects its valid chip production capacity, so that a high performance has a very beneficial impact on the competitiveness of semiconductor manufacturers. What was not yet clear was if the cost derived from the production of these semiconductors was perceptibly higher than that of comparable chips manufactured in Taiwan. Now an interesting report of Techinsightsthe respected Canadian analysis company that revealed that Huawei and SMIC had managed to produce Integrated 7 Nm circuitsshed light on this matter.

According to G. Dan Hutcheson, Techinsight’s analyst signed by the article, producing a 300 mm wafer on his new Arizona plant costs TSMC less than 10% more than manufacturing that same wafer in one of its Taiwan facilities. It is explained by something that we should not overlook: the cost derived from labor represents less than 2% of the total cost.

Salaries are much higher in the US than in Taiwan, yes, but Chips factories are highly automated. And equip them with the lithography machines that require essentially costs the same in the US and Taiwan. There is no doubt about one thing: they are good news for American customers of TSMC, among which are Apple, Nvidia, AMD or Broadcom.

Image | TSMC

More information | Techinsights

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