TSMC’s overseas fabs in the U.S. have been in the works for a long time, and now the company has begun negotiating orders and pricing with its customers. According to a DigiTimes report, the foundry leader is quoting 30 percent more for semiconductor chips made in the U.S. than in Taiwan because making fabs in the U.S. is more expensive than making them at home.
TSMC’s N4 and N5 process technologies in the U.S. will cost about 20% to 30% more than their Taiwanese counterparts, while chips made at Japan’s Kumamoto facility on the N28/N22 and N16/N12 nodes will cost 10% to 15% more. % may be higher. Expensive TSMC is passing on the high cost of manufacturing fabs in the US and Japan to its customers to be able to maintain its gross margin target of 53%. Customers in the States are continuing to negotiate with TSMC and may shift some of their orders to Samsung Foundry to help balance their budgets.
Among the companies that could consider Samsung Foundry to make their chips are AMD and Qualcomm, while NVIDIA could offer Intel Foundry Services to build chips on Intel’s 18A and 20A technologies. However, as chip designs also become more complex and expensive, it will be difficult for chip design companies to order identical chips from both TSMC and Samsung.
Apple, TSMC’s most loyal and largest customer, reportedly maintains a discount of around 20-30%, contributing 25% of TSMC’s revenue. This scale has attributed to a close partnership between the two companies, while also advancing the transition of processes. Apple is also one of the early adopters of TSMC’s leading chip technologies.
TSMC’s fab in Arizona will begin production in early 2024 using advanced 5nm technology.
Source: DigiTimes (paywall)