AMD (AMD) Accepts Higher U.S. Chip Costs to Strengthen Supply Chain

Advanced Micro Devices (AMD, Financials) is going forward with plans to get chips from Taiwan Semiconductor Manufacturing Co.'s Arizona plant, even though it will cost more. The company is betting on the stability of the supply chain over short-term savings.

The corporation thinks that chips made in the U.S. are 5% to 20% more expensive than chips made in Taiwan. AMD sees this change as a long-term investment in reliability, based on what they learned during the epidemic.

Earlier this year, TSMC's Arizona plant started making 4nm circuits. It's said that the yields and quality are the same as what the corporation gets from its operations in Taiwan, and demand has been so high that capacity is apparently reserved through late 2027.

By the end of this year, AMD should start getting chips from the U.S. factory. As part of a larger effort to rely less on overseas production, it will join Apple and Nvidia (NVDA, Financials) in leveraging domestic suppliers.