TSMC To Charge Premium Pricing For Chips Made In The USA
Over the coming years and decades, we're going to see a lot more computer chips manufactured on U.S. soil, with companies like Intel and TSMC investing heavily on new and upgraded semiconductor fab sites in North America. Lest it need be said, however, TSMC has confirmed that chips produced in the United States are likely to carry an up-charge compared to semiconductors produced in Taiwan.
TSMC boss C.C. Wei stated as much during an earnings call to discuss the company's latest revenue figures for the first quarter of 2024. Charlie Chan, an analyst with Morgan Stanley, asked about the "ongoing cost challenge" of making chips in the U.S. and whether TSMC is "planning to hike [the] price" for a range of semiconductors in 2025.
"We do encounter some kind of higher cost in the overseas or even recently, the inflation and
the electricity. We expect our customers to share some of the higher cost with us, and we already started our discussion with our customers," Wei said.
"And as I said, for the overseas fab, we want to share our value, which also includes the flexibility of geographic location or something like that. If
my customer requests to be in some certain area, then definitely, TSMC and the customer had to share the incremental cost," Wei added.
Wei did not specify what kind of pricing premium would apply to chips produced outside of Taiwan, which not only includes the U.S., but at TSMC's fabs in Germany and Japan. Interestingly enough, however, Digitimes reported around this time a year ago that quotes for TSMC's advanced chips made at its Arizona fab were estimated to be 20-30% higher than corresponding prices in Taiwan.
The latest comments come just days after TSMC secured $11.6 billion in funding from the CHIPS and Science Act, which includes $6.6 billion in grants and up to $5 billion loans. In part, the funding will go towards building a third facility in Arizona where TSMC will produce advanced 2-nanometer chips.
"For the first time ever, we will be making at scale the most advanced semiconductor chips on the planet here in the United States of America, by the way, with American workers," U.S. Commerce Secretary Gina Raimondo stated at the time.
Meanwhile, Intel also recently announced big funding from the CHIPS and Science Act, with the chip maker scoring $8.5 billion, with plans to take advantage of tax credits that could potentially be worth billions of dollars.
