TSMC: 5 and 4 nanometer chips produced in the United States can be up to 30% more expensive

2023-05-04 07:30:00

TSMC should start producing chips in its new factories in the United States, and according to a report released on Tuesday (04) by DigiTimesthe North American facilities will manufacture 5 and 4 nanometer chips, whose prices can be between 20% and 30% higher than charged for semiconductors cast in Taiwan.

The company’s foundry operations in the west are expected to start in mid-2024. A plant in Arizona, United States, is expected to be used for the production of wafers of silicon with the N5 and N4 lithography, however, the materials must have a higher price for manufacturers like AMD and Qualcomm, which rely on the processes in question.

The production cost will also be higher in countries other than Taiwan. The TSMC plant in Kumamoto, Japan, is expected to charge values between 10% and 15% higher for the production of chips with N28, N22, N16 and N12 lithographs.

According to Taiwanese media, the purpose of the discrepancy in the price of wafers is to maintain the interest of its investors by continue with a gross margin rate of 53%since the company must pay high taxes and other contributions to countries in which it operates.

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Although the costs involved in product logistics are low for some North American companies, it is possible that not all manufacturers are attracted by the high prices of semiconductor foundry in the United States, which could give scope for the growth of the foundry services of the intel.

It is still early to deduce which companies will order chips from TSMC’s facilities in the United States, but during an event in the construction area of the Arizona unit, Tim Cook, Apple’s CEO, said that he intends to expand his work with the semiconductor giant and participate in the formation of its new roots in the West.

NVIDIA is another company that has commented on its interest in hiring the Arizona factory. The hardware giant did not reveal details about its strategy for the coming years, but it is worth remembering that TSMC is responsible for producing the graphics chips that power the GeForce RTX 4090, 4080, 4070 Ti and other video cards in the line.

TSMC is preparing to launch its new lithography, the N3 (3 nanometers), but which should be produced only in the east, at first. One of the first chips that will use this technology may be the Apple A17 Bionic, which will power the iPhone 15 Pro and iPhone 15 Pro Max (or Ultra) in 2023, according to rumors.

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