TSMC"s overseas fabs in the U.S. have been under the works for quite some time now, and now the company has started discussions with its customers about orders and pricing. According to a report by DigiTimes, the foundry leader is quoting up to 30% more for semiconductor chips made in the U.S. than those in Taiwan as building fabs in America is significantly more expensive than building them at home.
The price of TSMC"s N4 and N5 process technologies in the U.S. will be around 20% to 30% higher than their Taiwanese counterparts, while chips made in Japan"s Kumamoto facility on N28/N22 and N16/N12 nodes might be 10% to 15% more expensive. TSMC is passing the high cost of building fabs in the U.S. and Japan to its customers so that it is able to maintain its gross margin target of 53%. Customers in the States are continuing negotiations with TSMC and might shift some of their orders to Samsung Foundry to balance their budgets.
Among these companies could be AMD and Qualcomm which might consider Samsung Foundry for manufacturing their chips, while NVIDIA could give Intel Foundry Services a go to make chips on Intel"s 18A and 20A technologies. However, as chip designs are also getting more complex and costly, it will be hard for chip design companies to order similar chips from both TSMC and Samsung.
TSMC"s most loyal and largest customer, Apple, is reportedly maintaining a discount of about 20-30%, which contributes to TSMC"s 25% of revenue. The scale has attributed to a close partnership between both companies, while also advancing process migration. Apple also is one of the early adopters of TSMC"s leading chip technologies.
TSMC"s fab in Arizona is expected to start production in early 2024 using advanced 5nm technology.
Source: DigiTimes (paywall)