why amd is willing to pay 20% more for us-made chips

2025-07-24 tsmc

Washington, D.C., Thursday, 24 July 2025.
amd ceo lisa su revealed that chips from tsmc’s arizona plant will cost 5% to 20% more than those from taiwan. despite the higher price tag, amd views this as a strategic move. su emphasized that securing supply chains is worth the extra cost. the ai chip market could surge past $500 billion, making reliable production crucial. amd plans to receive the first arizona-made chips by year’s end.

tsmc’s arizona fab and cost implications

The increased costs at TSMC’s (TSM:NYSE) Arizona facility have implications for its stock [GPT]. AMD’s decision to absorb higher costs reflects a broader industry trend toward prioritizing supply chain resilience and strategic autonomy [1]. TSMC’s Arizona fab is now producing chips for Apple Watch S9 SiP and AMD’s Ryzen 9000 series [6]. Despite higher labor costs in the U.S., automation mitigates some cost impact [8]. However, construction and chemical supply chain challenges contribute to overall expenses [8]. These factors could affect TSMC’s profit margins, potentially influencing investor sentiment [8].

manufacturing capacity and geopolitical risks

TSMC’s Arizona plant diversifies manufacturing capacity, addressing geopolitical risks [1]. Lisa Su noted that supply chain resilience is crucial, referencing pandemic-related disruptions [3]. Securing U.S.-based production reduces reliance on Taiwan, mitigating potential risks from geopolitical tensions [1][3]. This strategic move could stabilize TSMC’s long-term revenue streams, reassuring investors concerned about concentration in specific regions [GPT]. This diversification is viewed favorably, enhancing the attractiveness of TSM stock as it navigates global uncertainties [1].

market leadership and competitive dynamics

AMD’s willingness to pay more for U.S.-made chips signals confidence in its competitive position [1]. The AI chip market’s projected growth to over $500 billion underscores the importance of reliable supply [1]. AMD’s MI350 series accelerators aim to challenge Nvidia’s dominance in the AI compute market [1]. HSBC upgraded AMD to a “Buy” rating, citing its strong AI product roadmap [1]. Securing chip supply from TSMC’s Arizona fab supports AMD’s growth, potentially impacting market share and investor confidence in both AMD and TSMC [1].

Bronnen

tsmc arizona chip costs