Feed: Engadget is a web magazine with obsessive daily coverage of everything new in gadgets and consumer electronics
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Title: TSMC will charge more for chips made outside of Taiwan, possibly
making devices more expensive

Date: Thu, 18 Apr 2024 14:51:47 +0000
Link: https://www.engadget.com/tsmc-will-charge-mor...

TSMC is the worldΓÇÖs biggest chipmaker and its products are found in
everything from phones to game consoles and computers. But devices using TSMC
chips could become more expensive if manufacturers opt to buy ones that the
company makes outside of its home base of Taiwan.

ΓÇ£If a customer requests to be in a certain geographical area, the customer
needs to share the incremental cost,ΓÇ¥ TSMC CEO CC Wei said on an earnings
call. ΓÇ£In todayΓÇÖs fragmented globalization environment, cost will be
higher for everyone, including TSMC, our customers and our competitors.ΓÇ¥

Talks with customers over price increases have already started. As the
Financial Times points out, itΓÇÖs more expensive for TSMC to manufacture
chips outside of Taiwan (where over 90 percent of the planetΓÇÖs most
advanced semiconductors are made). But the company will be passing on those
costs amid a push by companies and governments to increase chip supply
outside of Taiwan, over which China is attempting to control.

TSMC has plants in Japan and is building several in Arizona, the first of
which started operating this month and is expected to go into full production
this year. ItΓÇÖs also constructing a plant in Germany.

In addition, the US government last week agreed to provide the company with
$6.6 billion in funding under the CHIPS Act, which seeks to bolster
semiconductor manufacturing in the country. In return, TSMC pledged to up its
US investment by $25 billion to $65 billion. Aligned with that, the company
announced plans to build a third US plant by the end of the decade and to
start making more advanced 2nm chips by 2028.

Meanwhile, TSMC expects its manufacturing costs to increase in Taiwan.
ThatΓÇÖs because power prices there are soaring. An earthquake earlier this
month is also expected to have a negative effect on the companyΓÇÖs
profitability, as is its struggle to make the manufacturing of its most
advanced 3nm chips more efficient.

Apple, NVIDIA, AMD and Qualcomm are among TSMCΓÇÖs more notable customers. So
if they end up buying chips from the companyΓÇÖs US, Japan or Germany fabs,
their manufacturing costs could go up. Take a wild guess whoΓÇÖd end up
having to eat the cost of those increased expenses so device makers can
maintain their profit margins.

This article originally appeared on Engadget at https://www.engadget.com/tsmc-
will-charge-more-for-chips-made-outside-of-taiwan-possibly-making-devices-
more-expensive-145146879.html?src=rss

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