U.S.-Made Microchips Cost 20 Percent More Than Taiwan’s
(MENAFN) Microchips produced in the United States carry a price tag up to 20% higher than comparable chips manufactured in Taiwan, according to Lisa Su, CEO of AMD, a top purchaser of these components.
Washington is aggressively encouraging expanded domestic production of cutting-edge semiconductors as part of its strategic competition with China. Control over chip supply chains has become a critical arena in this geopolitical contest. Taiwan Semiconductor Manufacturing Co. (TSMC), caught between economic and political pressures, revealed plans in 2020 to relocate some of its manufacturing operations to Arizona.
During an artificial intelligence conference in Washington on Wednesday, AMD’s CEO acknowledged the price disparity, stating it was “more than 5% but less than 20%.” In a separate interview with media, Su emphasized that the higher costs are justified.
“We have to consider resiliency in the supply chain,” Su said. “We learned that in the pandemic.”
The Biden administration took significant steps in 2022 by passing legislation allocating $280 billion to strengthen US semiconductor manufacturing. Additionally, AMD and former President Donald Trump announced a $100 billion investment plan to establish five new chip fabrication plants across the country.
Nevertheless, TSMC has highlighted various difficulties encountered in the US, such as steep construction expenses, a lack of skilled workers, and complex logistical issues.
The Trump administration also enforced export restrictions on advanced chips, especially those used in AI, aiming to limit China’s access to state-of-the-art technology. These controls have driven Beijing to accelerate its domestic chip development initiatives.
Taiwan has been self-governed since the late 1940s after the Chinese civil war, when nationalist forces retreated there. China regards Taiwan, which is supported by the US-backed government, as an inseparable part of its territory. While Beijing officially seeks peaceful reunification, it has repeatedly threatened military action should Taiwan declare formal independence.
Taiwan’s semiconductor leadership traces back to its swift industrial growth in the 1970s, fueled by low wages and foreign investments. TSMC was established in 1987 as a key part of Taiwan’s strategic move toward advanced manufacturing.
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