A 20% premium for one of the pillars of a modern economy to both repatriate engineering knowledge as well as be significantly less threatenable by your primary geopolitical enemy would be money very well spent.
The question is: what’s AMDs margin? 20% manufacturing cost maybe well below 1% of the total development cost. So, not a deal breaker at all.
It seems to me that long term having fabs in the IS is net positive for the economy: more jobs, more localized supply chains, more local expertise, etc etc
The article doesn’t say, but I assume these are SOTA AI chips? If so, it’s a huge deal that American can build them.
Another interesting point:
> AMD and larger rival Nvidia Corp. recently gained a reprieve on restrictions imposed on shipments of some types of artificial intelligence accelerators to China. It’s still not clear how many licenses will be granted — or how long the companies will be allowed to ship the chips to the country, the biggest market for semiconductors.
It sounds like they’re trying to give China some chips but not as many as American allied countries. I wonder if they’re trying to get China “addicted” to western AI chips to hurt Chinese chip manufacturing development?
Honestly I thought they might be even more expensive than this 5%-20%, it's good to see that it's not a 100% more expensive. While it seems we've learned some lessons about supply chain resiliency, I'm sure there's a number that puts the brakes on this thing.
A 5-20% markup on CPUs isn't the worst thing, but those still need a mobo to socket into and as far as I'm aware we still don't have much capability on the availability of boards. Are there any companies that are spinning up board production, or even just broader consumer electronics in general (arduinos, pis, general controllers and the like)?
This is why tariffs matter. Despite the US having much higher wages, and likely property and infrastructure costs, manufacturing is only 5-20% more for these high tech products.
Corporations outsourced not because they couldn't compete, but because why leave 10% on the table when we can reward the executives with that cash instead of the labor?
When (not if) China invades Taiwan, those Taiwanese-made chips will disappear overnight. Even if China takes over the TSMC fabs intact, they'll be disrupted for years.
So sure, right now we might not want to pay that 20% markup for US-made chips, but 20% will be cheap if the only operational TSMC fabs are in the US.
The US cost of stationing forces, patrols, and readiness in the pacific is probably 20-40 billion USD per year. cut that huge subsidy and Taiwan ceases to exist within several years. 5%? we should really evaluate if we need a long term dependency on taiwan. It would probably be better to evacuate them all.
I run an AMD NeoCloud. People are extremely price sensitive and due to the competitive nature of the industry, I'll likely be the one absorbing this increased cost.
If they were worth it you'd already have been buying them. With that being said, glad to hear a CEO say "we have to consider the resiliency of the supply chain" because JIT as a manufacturing philosophy is revealing itself to be what it always was: exceedingly fragile, barely adequate when everything is working perfectly and subject to massive, multiplicative disruptions when everything is not working perfectly.
You can get much more then a 5%-20% higher price from the kind of customers which really care about US production (I mean like government, CIA, NSA, which also get stuff like AMD systems with hyper threading disabled or special treatment wrt. management units in a CPU etc. I don't mean people caring for the US, for that target group, from what I have seen over the years, I guess, 5% can work 20% is tricky).
I see the point being made here, and yeah 5%-20% extra for what amounts to insurance against geopolitics isn't too bad, but doesn't this all fall apart when China catches up?
That 5%-20% is worth it now because no one else can fabricate competing chips. In a competitive market, 5%-20% can be the difference between having the price edge or not. I understand why the USA wants TSMC to manufacture outside of Taiwan, but perhaps it makes sense to move it not the USA but, say, Mexico?
Chinese car companies seem to be slowly but surely rolling American car companies in international markets with great value at low prices. The move in this market evidently isn't to move manufacturing away from Mexico at a 5%-20% increase in price.
In the chip market there's less immediate competition, but I can only imagine it'll come. Hopefully economies of scale would have removed this extra 5%-20% by the time China catches up?
Capital expenditures are the dominant cost for semi fabs. Labor is actually relatively small. For example, "just" a tester machine, which tests parts before final, cost $5-10M each, and there are usually rows of these machines as far as the eye can see.
I see what she did here. That's just for silicone, not for the ready to use product. I expect the final US-made CPU available for sale cost to jump significantly higher than 20%
> “I think the economics of it are we have to consider the resiliency of the supply chain, I think we learned that during the pandemic — the idea that you think about your supply chains not just by the lowest cost, but also about reliability, about resiliency, and all those things. I think that’s how we’re thinking about U.S. manufacturing,” [AMD CEO Lia Su] said to Bloomberg’s Ed Ludlow.
This almost sounds verbatim what U.S. Secretary of the Treasury Scott Bessent told Bloomberg yesterday, so take the headline phrase “worth it” in that context.
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[ 1.6 ms ] story [ 63.8 ms ] threadA 20% premium for one of the pillars of a modern economy to both repatriate engineering knowledge as well as be significantly less threatenable by your primary geopolitical enemy would be money very well spent.
It seems to me that long term having fabs in the IS is net positive for the economy: more jobs, more localized supply chains, more local expertise, etc etc
https://www.bloomberg.com/news/articles/2025-07-23/amd-ceo-s...
Another interesting point:
> AMD and larger rival Nvidia Corp. recently gained a reprieve on restrictions imposed on shipments of some types of artificial intelligence accelerators to China. It’s still not clear how many licenses will be granted — or how long the companies will be allowed to ship the chips to the country, the biggest market for semiconductors.
It sounds like they’re trying to give China some chips but not as many as American allied countries. I wonder if they’re trying to get China “addicted” to western AI chips to hurt Chinese chip manufacturing development?
They used to be a crown-jewel of US tech. But it seems like every time I read the news, they are announcing a delay or shutting down some product.
Corporations outsourced not because they couldn't compete, but because why leave 10% on the table when we can reward the executives with that cash instead of the labor?
I'm fine with chips made in Taiwan.
So sure, right now we might not want to pay that 20% markup for US-made chips, but 20% will be cheap if the only operational TSMC fabs are in the US.
You see it with Columbia university and that network television network that got sued
And yes, no matter what you think of America First (I'm not even American), that sounds very much worth it.
That 5%-20% is worth it now because no one else can fabricate competing chips. In a competitive market, 5%-20% can be the difference between having the price edge or not. I understand why the USA wants TSMC to manufacture outside of Taiwan, but perhaps it makes sense to move it not the USA but, say, Mexico?
Chinese car companies seem to be slowly but surely rolling American car companies in international markets with great value at low prices. The move in this market evidently isn't to move manufacturing away from Mexico at a 5%-20% increase in price.
In the chip market there's less immediate competition, but I can only imagine it'll come. Hopefully economies of scale would have removed this extra 5%-20% by the time China catches up?
This almost sounds verbatim what U.S. Secretary of the Treasury Scott Bessent told Bloomberg yesterday, so take the headline phrase “worth it” in that context.