AMD Gears Up for US Chip Production Amid Rising Demand and TSMC Price Hikes

AMD CEO says ready to start chip production in Arizona, to make more AI servers in US

TAIPEI, April 15 (Reuters) - Advanced Micro Devices' (AMD.O), opens new tab Chief Executive Lisa Su said on Tuesday that it is ready to start chip production at its Arizona plant and will certainly make more AI servers in the U.S. Su was speaking to reporters at National Taiwan University in Taipei. U.S. President Donald Trump said on Sunday he would be announcing the tariff rate on imported semiconductors this week, adding that there would be flexibility with some companies in the sector. AMD, one of the largest providers of personal computer chips, relies mostly on TSMC (2330.TW), opens new tab, the world's largest contract chip maker in Taiwan to make its chips. Reporting by Wen-Yee Lee in Taipei; Editing by Jacqueline Wong Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Artificial Intelligence

AMD's Lisa Su Breaks Silence on US Chip Strategy as TSMC Hikes Pricing

AMD CEO Lisa Su (in image) has confirmed the chipmaker is ready to begin production at TSMC Arizona facility, as demand surges in the U.S. | Credit: Jerod Harris / Stringer Advanced Micro Devices (AMD) CEO Lisa Su has confirmed the U.S. chipmaker is ready to begin production at Taiwan Semiconductor Manufacturing Company's (TSMC) Arizona facility. The announcement follows a surge in demand from tech giants like Apple and Nvidia, spurred by the Trump administration's sweeping tariffs on overseas chip production. This sudden increased demand for the plant has pushed TSMC to hike its prices -- raising questions over the potential rivalry between AMD and Nvidia. AMD Moves Ahead With TSMC Speaking outside the National Taiwan University in Taipei on Tuesday, April 15, Su stated that AMD is prepared to commence manufacturing at TSMC's U.S. plant. "When you think about the importance of the supply chain, we need to have a presence everywhere," Su said . "Taiwan is critically important to us, but so is the United States." Su also revealed that AMD plans to boost its AI server capabilities in the U.S. following its recent $4.9 billion acquisition of server manufacturer ZT Systems. As one of the world's largest providers of personal computer processors, AMD relies heavily on TSMC to fabricate its chips. Tariffs Drive Domestic Demand The rise in domestic chip orders is a direct result of former President Donald Trump's tough export tariffs. These tariffs have pressured tech companies, who previously saw sourcing chips in the U.S. as a slower and more expensive route, have been forced to shift their chip sourcing to domestic facilities to avoid additional costs, according to a report by DigiTimes . TSMC has responded to the influx of orders by raising the price of its 4nm chip production in the U.S. by 30%, citing the sudden imbalance between supply and demand. The plant, which currently produces between 20,000 and 30,000 units monthly, is reportedly struggling to meet the spike in demand, which could lead to potential supply chain disruptions. AMD vs. Nvidia: A Renewed Rivalry Under Su's leadership, AMD has transformed dramatically -- growing from a near-bankrupt company valued at $2 billion in 2014 to a $172 billion tech powerhouse. AMD surpassed Intel in market value in 2022 and now has its sights set on its primary competitor, Nvidia. Despite its success with processors for Microsoft's Xbox and Sony's PlayStation, AMD still trails Nvidia in the booming AI chip market. In an effort to catch up, Su pivoted AMD's manufacturing strategy to use "chiplets" -- smaller, modular chip components that are later assembled into a complete chip. This approach has enhanced production flexibility and allowed AMD to use multiple foundries for different parts of the chip. However, both AMD and Nvidia depend on TSMC for their chip fabrication, meaning the Arizona facility has become the new battleground. With Nvidia's $3 trillion market valuation and larger financial cushion, it may be better positioned to absorb TSMC's price hikes and secure favorable production slots.