Advanced Micro Devices Inc. will pay between 5% and 20% more for chips manufactured at Taiwan Semiconductor Manufacturing Co.’s Arizona facility compared to those produced in Taiwan, Chief Executive Officer Lisa Su confirmed during an artificial intelligence event in Washington.
The disclosure makes AMD the first major customer to publicly acknowledge the price premium for TSMC’s U.S.-made semiconductors, providing concrete evidence that the world’s largest contract chipmaker is passing higher operational costs to clients. Su emphasized that the extra expense was justified to diversify supply chains and reduce vulnerability to disruptions experienced during the pandemic.
AMD expects to receive its first customer-ready chips from the Arizona facility by year-end, with production yields already matching those achieved at TSMC’s Taiwan operations. The chips will power AMD’s next-generation server processors and other advanced computing products.
The pricing confirmation comes as TSMC expands its U.S. presence significantly. The Taiwanese company announced intentions to invest an additional $100 billion in American operations, bringing total planned investment to $165 billion. The expansion includes three additional fabrication plants, two advanced packaging facilities and a major research and development center.
TSMC’s first Arizona facility began production using 4-nanometer technology in late 2024, with a second plant scheduled to produce 2-nanometer and 3-nanometer chips by 2028. When completed, the Arizona complex will span over 1,100 acres and employ approximately 6,000 workers directly.
The higher manufacturing costs reflect challenges of establishing advanced semiconductor production in the United States, where construction expenses, permitting processes and skilled labor command premium prices compared to Taiwan’s mature manufacturing ecosystem. However, some industry analysis suggests actual production cost differences may be closer to 10%, indicating TSMC may be charging additional premiums beyond pure operational expenses.
The Arizona project received $6.6 billion in direct funding and $5 billion in loans through the U.S. CHIPS and Science Act, part of the Biden administration’s effort to reduce American dependence on Asian semiconductor manufacturing. TSMC expects the expanded investment to create 40,000 construction jobs over four years.
