AMD CEO says its chips made in the US will be up to 20% more expensive, but claims that it’ll be worth the price hike
Posted by bubblesort33@reddit | hardware | View on Reddit | 251 comments
comeonwhatdidIdo@reddit
Yes, worth the price for AMD! Common Consumers will feel the cost pinch sharply.
Wermys@reddit
Because she knows once tariffs go away in 2 years at most that she can back that 20 percent into extra margin.
cnrdvdsmt@reddit
I don't get the reason behind this
Limis_@reddit
Accordingly, Intel should actually have an advantage with 18A — and even more so with 14A — both of which are being manufactured in the USA.
Helpdesk_Guy@reddit
I think the term you were looking for, was actually ›fabricated‹. Intel fabricates things in the USA.
grumble11@reddit
Issue is 18A is looking to have performance issues. It's looking like it's going to end up delivering at about the low-end of N3 since Intel has scaled back their performance expectations for the node and Panther Lake has terrible parametric yields (meaning the process is under-delivering on performance relative to simulations) so it might be even worse.
My guess is that 1) Intel just isn't as good at this as TSMC culturally, 2) Intel is doing too many things at once (GAAFET and BSPD), and 3) are having issues having the performance match up with expectations (process itself is immature and they're having issues with the libraries not delivering performance expected).
Nodes cost too much to develop now and it only makes sense to go for the cutting edge if you have the scale. TSMC has it. China has it. Japan probably doesn't, but they can try with Rapidus. Intel doesn't have it unless they get external customers and they won't get external customers if their processes are a year late, miss performance expectations, have a bad PDK and chips built off stated scaled-back performance still badly miss parametric yields, have poor customer support, are run by a company that makes competing chips with a history of being scummy and is clearly deteriorating and may not even actually make the node you'll sign up for.
To be a manufacturer of this stuff you have to have a clear roadmap and you have to deliver on time and on spec, you should have a great PDK and good customer support, and Intel doesn't have that. Apple forced TSMC to deliver for its product cadence and at TSMC if you aren't delivering then you sleep at the office until you do.
Helpdesk_Guy@reddit
I talked with someone the other day, I think it's perfectly possible for 18A to be viable in terms of actual yielding products (speaking strictly technical here on mere die-usability!).
The issue is likely just, that they can't meet given performance-metrics and in this sense, the node is virtually unsubale for their own CPUs. Matters are further complicated by the fact, that even if they get enough (e.g. low-clocking, voltage-leaking) healthy bins, it's bleeding them dry due to scale alone.
The irony is, that Intel always knew that and even bragged about the point you are touching here (economy of scale) for years, now it affects them themselves.
Then again, it's truly mind-boggling how effing the refusal of the Apple-deal keeps on hunting Intel, when Intel could've even been license-build ARM-designs, without even having own ARM-designs and staying with x86 only.
Intel needed all these ARM-cores to fix their manufacturing and get the yields up – You can only go so far with times bigger CPU-cores making glorified waste for billions in losses in return …
The utterly grotesque irony and joke of all is, that it wasn't just the very ARM-induced economy of scale of a gazillion of ARM-cores, which catapulted TSMC forward into outer realms – It were these darn cores alone!
Since TSMC got basically billions of tiny, little pipe-cleaners, yield-jumper and ramp-kickstarters handed on a palladium-shod, gold-plated silver platter as the opportunity of the century, for constantly kickstarting their nodes with the proverbial brake-cleaner in form of infinitesimal ARM-cores, making them for cents on a dollar, while getting not only profits off of them, but being ever so often granted incredibly high-yielding nodes for it in return.
It's crazy how much TSMC (and all other semis in tow) profited from the mobile rise of ARM-cores, by perfecting their nodes through manufacturing them – Intel could've been one of them. Not making huge profits, but fixing nodes.
So Intel got basically gifted the opportunity to band-aid their manufacturing, and they tossed it over margins! -.-
ResponsibleJudge3172@reddit
Pantherlake?
Helpdesk_Guy@reddit
Quod erat demonstrandum.
HeadStartSeedCo@reddit
What’s the difference between manufactured and fabricated
Helpdesk_Guy@reddit
TSMC manufactures nodes on the Leading Edge, Intel fabricates them.
Limis_@reddit
Thanks
effrightscorp@reddit
Intel is looking at stopping construction on one of their new US fabs that was supposed to be dedicated to 14A because they can't find any external customers, and are laying off 25000 employees this year (not all in the US, but still thousands at some US locations).
Nanas700kNTheMathMjr@reddit
No, they have paused construction waiting for customers. They haven't given up on it. Two completely different things.
bubblesort33@reddit (OP)
I'm just curious how this would work. If you see a "made in US" and a "made in Taiwan" CPU on shelves, you're likely not going to pay extra for the US model. What I find more likely is that they'll sell them at the same price, subsidize the price of the US chip cost losses by raising the prices of all the chips by 5-10%
Tetragig@reddit
I'm sure the US government is happy to pay a premium for domestically produced chips.
jigsaw1024@reddit
It's not just the US government that will pay a premium for US produced chips.
I'm sure there are many other governments and organizations that will pay that premium.
SpicyCommenter@reddit
Why would they if they didn't have to
FrewdWoad@reddit
Carefully-hidden backdoors have been detected in some Chinese tech (remember the scandals with Lenovo and Huawei?). I can see certain US government departments being worried about that insisting on "Made in USA".
Jingoistic racism, and/or patriotism
Strazdas1@reddit
Because they may need to pass certification requirements that arent possible if you use unknown sourced chips.
996forever@reddit
What exactly do you mean “unknown” source when it’s still a TSMC factory or a Samsung factory or an Intel factory?
Strazdas1@reddit
There could be a requirement to be manufactured in country or some "greenlit" company list.
996forever@reddit
There “could be” a requirement from whom exactly? And since we are talking about TSMC which is already a factory for AMD, I’m quite certain it is already a “greenlit” (again I don’t know whom by this is supposed to be) company.
Strazdas1@reddit
From clients.
996forever@reddit
Who clients? HP? Dell? Lenovo? Asus? Supermicro? Does not seem like they gave a shit thus far.
Strazdas1@reddit
no, those are intermediaries. the clients are companies that are end users and want to follow their own strick security protocols.
996forever@reddit
They can make their own hardware. Otherwise it does not appear they have many options.
Physmatik@reddit
Are you 15?
996forever@reddit
No, and what does this have to do with other user’s bizarre choice of adjectives?
Physmatik@reddit
Because there is nothing bizarre about "unknown".
996forever@reddit
What exactly is "unknown" about chipmaking giants with clients as big as AMD? Please let us know.
Physmatik@reddit
Because of governmental level you can about more than just price. Domestic also means autonomous. If something happens (not even talking ww3, just remember covid) you still have functioning supply chains.
Plank_With_A_Nail_In@reddit
The money you saved not over paying for a commodity can be spent on something else to do with security.
Autarky is a fools errand, security is what you want not self sufficiency.
StickiStickman@reddit
China and Taiwan seems like a WAY more secure supply chain for the whole world. So if anything, the US chips should be much cheaper with how unstable it is.
yoontruyi@reddit
Until there is a war.
StickiStickman@reddit
Well, looking at the last 50 years ... So China has an even bigger advantage?
meshreplacer@reddit
China seems a bit uppity lately looking for trouble instead of keeping calm and just focus on selling goods. But China chose a former Pig farmer to be dictator in charge and he cant think the long game like the prior leadership.
Physmatik@reddit
This comment thread is about US government.
StickiStickman@reddit
It's not. Try reading:
devillee1993@reddit
Haha that is my feeling as well. You can't beat China regarding the manufacturer stability esp consider the current US administration
MotoFly@reddit
Lol
jhenryscott@reddit
We will buy American silicon when possible. I think a lot of orgs have supporting the domestic economy as part of their values. If HP/Dell brands this right it would be a hit.
meshreplacer@reddit
I would pay 20% for a CPU made in the US.
sambull@reddit
They do. We are transitioning to a top down planned market economy.
The government is going to force them to buy us based chips through leverage in other areas
Substantial-Singer29@reddit
Not really the way manufacturing works.
They would basically take the production of all the products and then you would have a percentage of what would be coming from the us. That percentage is added into the bulk yield of what's being produced. You then take whatever that increase percentage was in cost and distributed across the yield of all of the products.
Let's say you produce ten thousand units of something, and out of those ten thousand units a thousand of them are twenty percent more expensive to produce. You don't increase the cost of just those 1000 units by 20%.You distribute that across the yield of ten thousand.
That's not even mentioning the potential reality of increased yield, then allowing for you to be able to serve more markets or larger demand.
I mean, this is basically the way that manufacturing has worked since the Industrial Revolution. Or at the very least since we've started a broader globalization In manufacturing.
CorValidum@reddit
Cause Intel is going down and there will be no alternative…. AMD is about to become INTEL that we hated so much after they were without competition ;)
996forever@reddit
You people remind us every day this sub is an DIY PC enthusiast bubble with zero awareness of the vastly higher volume oem world.
CorValidum@reddit
LOL idk about OEM world nor should anybody else since even in that world Companies (to name one, Firefox) are struggling to keep those things running no matter how great of a deal they got from Intel! I care what we get as standard PC consumers! Mind you I am saying this as someone who owns (sadly) stock at Intel... I don't want them to die out since then AMD is done with Innovation 101% but as it is right now Intel is dead in consumer part and that part is more important for me than OEM and deals they make even if they are not happy and struggling after with their chips!
996forever@reddit
I hope HP, Dell and Lenovo (collectively accounting for 63% of global PC shipment in 2024) will get your memo.
Hint: As of July 2025 they carry a combined grand total of zero Granite Ridge (Desktop AM5 Zen 5) PC exact one year post launch. Yes, you read that right, zero.
DUNGAROO@reddit
Intel is hardly going down. They’re just not on the cutting edge of performance anymore. They still have the potential to be competitive in the market if they price their products appropriately. Their vertically integrated supply chains make them favored by many government/commercial buyers.
AntLive9218@reddit
I get that gamers are considered alarmist because they tend not to see outside of their bubble, but there's a lot more to that this time.
Intel server CPUs also lost a ton of market share because they were neither competitive in price, nor in compute efficiency.
The direction their architecture going is a clusterfuck, highlighted by the early warning sign of the instruction set regressing by AVX512 being taken away for already released products.
Unreliable products (Raptor Lake CPUs, multiple revisions of I225, Atom C2000, recent WiFi modules) mostly wiped off the long history of even enterprise users considering buying Intel products being the safer or only safe option.
Intel's way of doing business was being questioned for long, but people did business with them because they had good products. With that "safety net" removed, even business partners are suddenly a lot more picky, because there's no longer a good reason to put up with silly policies.
You are right at least regarding government needs which is why were there attempts to prop up it all up, and they still have some good products, like low power devices (that's the field gamers can't acknowledge), but the company seems to be in a bad position as a result of a not exactly hard to see mountain of bad business decisions finally catching up.
DUNGAROO@reddit
Yes they are losing market share across all of their business segments. Yes they desperately need to reform how they develop products and bring them to market to not slip further. But they’re also a massive company with billions in assets and many promising technologies in the pipeline. At the end of the day the Intel brand is still more valuable than AMDs even if their current product lineup doesn’t warrant it, and unless AMD and Nvidia reduce their dependency on foreign manufacturing the US Government will not allow Intel to “go down.”
tavirabon@reddit
Because the entire reason silicon is being pushed away from Taiwan is for national security. Those same reasons apply regardless if the fabs move to the US, Canada, EU. The story that kicked this all in motion: https://www.pcmag.com/news/does-your-motherboard-have-a-secret-chinese-spy-chip
Even if it was disputed, it's a valid vulnerability and between it and counterfeit goods, many countries would value the reduction in risk higher than the cost delta.
triemdedwiat@reddit
Naah, it is Cisco stuff that has the spy chips added....to the hard back door.
Positive-Road3903@reddit
bro.. this was debunked years ago as US propaganda..The bloomberg article made rounds across the mainstream media by throwing a legit server mobo manufacturer (Supermicro) under the bus, with no evidence at all
To this day, Bloomberg did not retract that paper nor offered any kind of apology speaks louder than words..aka propaganda
tavirabon@reddit
It doesn't matter how "propaganda" it is, it highlighted a very real vulnerability that once invented, becomes a real attack vector state actors may seek. But because the threat is less tangible in practice, I included the point on counterfeits, which has been proven many times over to happen and has been used in military operations.
Positive-Road3903@reddit
Oh I see, facts dont matter to you...fair enough
'"you can't reason someone out of a position they didn't reason themselves into"
cafk@reddit
I'd go way further back, besides the manufacturing pipe line - what was possible was also shown through TAO & Snowden leaks before that.
But fake chips with identical capabilities and untrusted drivers has been a big problem for "legacy" technologies like serial interfaces, as well known manufacturers stopped producing them and cheap alternatives got into mainboards for remote management in data centers - which enable management and remote control even if the computer is off (just assuming connected to Ethernet & power plugged in).
How many of the hundreds of components from your preferred mainboard manufacturer do you trust and know the source of - with firmware that is not under control by you or your mainboard vendor?
Those are completely unrelated to CPU related IP, but enable your sata/sas/usb/ethernet communication with the CPU.
meshreplacer@reddit
Well the US made version would be Berry compliant.
narwi@reddit
Most governments would not prefer "made in US" chips an in most cases cannot due to rules on competitive tenders.
Decent-Reach-9831@reddit
Like who? What government would want that outside of the US? Even our Canadian vassal state would refuse
teutorix_aleria@reddit
It's not a matter of choice, they will just raise prices across the board
jaaval@reddit
Maybe but they might not want to. Competition sets price levels and 10% price increase would hurt their competitiveness. They can sell at different price in USA and outside USA if needed.
kongweeneverdie@reddit
Not china.
reddit_equals_censor@reddit
*domestically produced dies
with parts coming from all over the world and does the usa have the advanced packaging yet at least?
advanced packaging is way easier and faster to stomp out of the ground than fabs of course, so that shouldn't be a major problem.
would be neat if someone makes a video going over what happens to usa made tsmc dies, where the parts for it are sources to make the die and then make the full cpu for example.
soggybiscuit93@reddit
The US was able to secretly source titanium from the USSR during the height of the Cold War to build the SR-71 planes used to then spy on the USSR.
Point being is that the realistically not everything can be onshored - but the more difficult the step in the process, the more critical is its role's location. Onshoring of fabs is more critical than onshoring of, say, raw silicon, which can still be sourced by alternative means.
Superb_Raccoon@reddit
98% of all titanium was obtained from the USSR, and not secretly.
It was, ironically, hard currancy that kept the USSR afloat an unknown number of extra years... we bought it to fight the USSR, who needed the hard cash to keep threatening us, who...
Yeah, fucked up.
More-Ad-4503@reddit
and the US requires rare earths processed in china and tungsten mined and refined in china to go to war with china. it's pretty funny
Vitosi4ek@reddit
And the USSR managed to import IBM PCs in the 80s for research institutes to reverse-engineer and make domestic clones.
soggybiscuit93@reddit
The USSR reverse engineering IBM PC's was one of their biggest mistakes they've ever made. Asainometry's video on the topic is great.
Strazdas1@reddit
Intel has domestic advanced packaging, its just more expensive option.
Soytaco@reddit
I can't tell if you're being sarcastic, but that's absolutely true, and there are really good reasons for it. Even if the price was 100% higher--or arbitrarily higher--it would be will worth buying American-made chips in a lot of contexts.
StickiStickman@reddit
For anyone outside the US ... Why? If anything it's the opposite.
Soytaco@reddit
For one example, basically anything in the defense sector (which is unfortunately enormous) requires 100% uptime and as close to 100% of the supply chain being domestic as possible, because we need protection against sabotage and espionage. If out chips our coming out of another country they could be vulnerable to some novel spying tech or even be made inoperable by an update.
If we're in war and the missiles wont launch and the planes wont take off because of computer issues--which happened recently to an overseas F35 for somewhat related reasons--we're fucked. We cannot give the power over our systems to other states that we're in competition with.
StickiStickman@reddit
I don't know if you're a bot or didn't even read my comment, but that's all literally just US ( and it's warmonger obsession).
diacewrb@reddit
Of course the us government are happy, it is taxpayer who maybe unhappy though.
But to be fair, the us government has a long history of overpaying for everyday items from soap dispensers to coffee cups.
5panks@reddit
When it comes to the military they're actually required to try to source what they need internally first.
fastheadcrab@reddit
Yea a lot people will say they want made in USA in social media comments and then go buy the cheapest stuff possible in a retailer. This has been proven time and again
Deep90@reddit
I think they mean for government/security applications.
fastheadcrab@reddit
Yeah, the US government would buy some. But there are already existing pipelines to get secure chips. The market isn't huge either since Taiwan TSMC chips, which is from a friendly country, aren't considered much of a security threat (so there will be no rip and replace).
Maybe the US will mandate it's organizations buy US fabbed chips (beyond security requirements), so AMD could eat into a bit of Intel's share there but that's about it.
The article (and by extension AMD) is saying that it would be good for supply diversification as a contingency but I think it's a significant price to pay. For consumer CPUs, AMD will certainly mingle them and raise the price overall precisely because nobody actually will buy a US chip for that alone.
Adorable-Fault-5116@reddit
Are there? Do you have more info on that? I don't know for certain what the us government considers secure, is it just "not made nearish to china"?
fastheadcrab@reddit
Yes, the Trusted Foundry program has existed for quite a while now, but that has been more for missiles and planes. There are processes to verify a chip is made securely (the chain of custody has to be traceable to avoid sabotage along the way).
Global Foundries, which consists of AMD and IBM's old foundry divisions and which used to make a lot of AMD chips before they gave up on 7nm, is one such supplier.
Such methods for verification could presumably also be used in chips for computers and servers. But even more important would be the need to keep a constant supply of chips for these devices in the event of a conflict.
Intel never bothered with this program even though their chips were all US made before moving to TSMC. My guess that it just wasn't worth the hassle when they were the king and raked in tens of billions a year. A few hundred thousand chips often made on older process nodes, even if you sell them to Raytheon or whatever for defense contractor markup, wasn't worth the time and regulations.
I think the government will probably move towards both expanding this verification program as well as encouraging or even outright requiring CPUs/GPUs used in government agencies to be made in the US. Partially for information security but also for economic security in the event of a conflict.
memtiger@reddit
This absolutely needs to be done for security reasons.
Right now, if a MAJOR war/conflict broke out with China, they would form a blockade of exports from Taiwan to any ally country. At that point, we'd be fucked for a lot of our product. But militarily, we'd be immensely vulnerable as time went on due to our single source for major chips, especially communications/cellphones.
Imagine a 5yr war going on without any new phones coming out of Asia to the US/Western allies as our cellphone batteries deteriorate in our phones that we can't upgrade. Same thing for laptops.
The Western allies HAVE to come up with a solution for this either through incentives to move production locally or tariffs against non-allies.
fastheadcrab@reddit
Yea, the problem is the current political climate isn’t helping achieve this. Regulatory, incentive, and taxation turmoil in the US is discouraging further investment. Corporations can always be counted on to do the cheapest thing possible and they won’t build any production if there’s a good chance their investment won’t pay off.
If I had to guess, some companies will make vague investment pledges to appease the current administration, as it seems to care more about image than anything else, but most won’t act on it. We’re already seeing companies pull back on investment in fabs overall.
Since Europe’s economy has been noticeably weaker than the US post financial crisis, it’s hard to see them investing much in cutting-edge fabs which can easily cost $20 Billion, if not more.
IMO the US probably needs to address its rare-earths issue first but it seems like not much action is being taken on this front. The Chinese use of it in trade disputes exposed just how vulnerable it can be, but unfortunately the US administration caved and many previous investments in this area have been cancelled.
memtiger@reddit
Agreed. However, rare earths CAN be stockpiled in a reserve like our oil reserves. Unlike chips. You can't have a vault of computer chips sitting around collecting dust and aging on a whim for a "just in case" emergency. Whereas with minerals they could be locked up for a dozen years and it wouldn't matter.
chapstickbomber@reddit
That comic about the US being doomed because it is missing some critical things and then a farmer in bumfuck nowhere finds the largest reserve ever has never been more powerful.
fastheadcrab@reddit
There are lots of it in the ground but without the infrastructure to process it, then it is worthless. That is what has been lost over the past decades. Caving in to China and not building more facilities will really hurt the US in the long run.
chapstickbomber@reddit
Tariffs seem strictly worse than simply having domestic sourcing requirements to ensure domestic supply. And why doesn't the Army have a mine in Wyoming already is the real question worth asking.
More-Ad-4503@reddit
maybe stop trying to overthrow China then?!?
soggybiscuit93@reddit
I think COVID was a good demonstration of why making supply chains fragile in the pursuit of efficiency can have negative consequences during unforeseen events. In many instances, supply chain optimizations and cost reductions are synonymous with reduced resilience.
wintrmt3@reddit
But having the fabs in the US doesn't actually achieve that if they depend on east asian inputs (which they do).
CheesyCaption@reddit
Guess what step 2 is.
callanrocks@reddit
Beg the US government for money to catch up to the overseas fabs and then do billions in share buybacks?
fastheadcrab@reddit
I agree, but achieving resiliency, if stated as a social goal, is the government's role since otherwise corporations will always chase the most profit.
The best way to accomplish this would be to do use consistent policy and likely some subsidies to provide an economic incentive for profit-making entities to do chip fabrication in the US. The current turmoil, regardless of political affiliation, is not especially conducive to promoting domestic chipmaking. The most likely outcome is that facilities in progress will be completed but widespread buildout does not occur.
soggybiscuit93@reddit
I wish there would be more consistency in regulatory frameworks then waking up to surprise tweets.
Chips Act was supposed to be a cornerstone of that. Im sure there's some expectation that the regulatory environment will return to some normalcy in a few years.
And ive had to deal with government contracts: country of origin is a big part of it. Theres already a long and consistently updated list of approved and banned vendors. Across the board (for example, an affiliate company we owned had an Chinese security camera system at one of their offices, and it caused problems during audits bidding on a completely different project / joint ventures). Even small municipalities are expected to use specific M365 Government licensing for emails to make sure their hosted exchange servers aren't even in the same server rack as standard commercial licensing.
These type of regulations tend to go unreported / unknown by the public, and just having US made AMD chips will likely lead to specific OEM laptops and servers in a few years with a US chip certification. I imagine the gov. Is waiting for Nvidia and AMD to have feasible domestic chip production options before a host of lawsuits come.
sitefall@reddit
Besides the need to use made in the US stuff for government work or whatever, I think most "consumers" that say it really mean they want some form of perceived quality. Whether or not that is true of "Made in USA" in 2025 is up for debate. If you look at power tools, it seems that even the most diehard "MADE IN MERICA" person is more than happy to buy something made in Asia (or Germany) if the quality is perceived to be the best.
Rustic_gan123@reddit
Creating quality tools requires experience, suply chain, factories etc, and if they can be bought somewhere else, then no one will bother with it, creating a vicious circle. All Asian countries, in order to capture certain industries, almost always used one or another form of protectionism for this, so that they would have personnel, experience and factories.
5panks@reddit
In the case of chips, it's not going to be your end user at Microcenter that cares about US made chips. It's going to be the US goverent, cybersecurity appliance manufacturers, and enterprise.
I wouldn't be surprised if we see Cisco roll out a line of firewalls with domestic chips.
fastheadcrab@reddit
The US has enough capacity to handle that. And all those devices are made on mature process technologies that could be built out relatively rapidly.
Moreover the US government itself already has a process for verifying chips. Most of the big manufacturers never got involved because it’s actually a tiny portion of the market and not worth the money. Even if the US government decided to also order all of the commodity CPUs and GPUs it uses in government agencies from domestic suppliers that would only be a small fraction of the market.
The vast majority of US chip consumption won’t need that, a chip made from AMD or Intel or Qualcomm is secure enough, regardlsss of the fabs. It’s not like the Huawei cellular devices that were rife with security holes and backdoors.
Even the US government likely won’t build the next supercomputer using chips made from a super secure pipeline, it would be exorbitantly expensive and like I said the standard suppliers are secure enough. This market is price sensitive enough where even the 20% premium for US-made TSMC chips would deter any business. Running a bunch of scientific calculations is not enough of a national security risk to justify any premium.
soggybiscuit93@reddit
The US government also does have HPC needs. They just tend to contract it out. Microsoft and AWS have their own dedicated server racks just for government contracts, physically separated. Intelligence agencies outsource data analytics to companies around the DC area that run datacenters full of the latest Nvidia GPU's.
Government contractors designing the next fighter plane or engineering the next dry dock use the latest CPUs/GPUs.
The US government, if they wanted to build out a datacenter or use a contractor's datacenter, aren't going to necessarily source parts directly. Theyre gonna require the servers and networking equipment procured have domestic chips, and OEMs will fill that market demand, like they always have, with certified models.
meshreplacer@reddit
It will have a made in the USA logo with a flag.
nokeldin42@reddit
Everyone replying to you is clueless lmao.
Much like iphones, AMD won't differentiate in the costs. Su said it was more of a supply chain robustness thing so net prices will be set according to production costs from both plants.
Another way would be to just have slightly different SKUs and adjust pricing that way.
I see the first option as more likely considering all that they've put out in the media.
Chipay@reddit
That'll just be another nail in the coffin for x86 then. ARM and RISC-V will be producing cheaper chips with a higher profit margin.
intelminer@reddit
Uh. You realize that it's not the ISA that matters here, right?
Guess who makes Apple's ARM based CPU's.
I'll give you a hint: they aren't being made in the US either
Chipay@reddit
That's my point, Apple gets to make cheaper ARM chips in Asia while x86's only remaining competitor pays extra to build them in the US instead.
jaaval@reddit
I wasn’t aware apple was in the business of selling chips.
Chipay@reddit
They do, they sell over 200 million A18's per year through iPhone sales alone
jaaval@reddit
So they sell phones. Not chips.
Chipay@reddit
In the same way Nvidia mostly sells servers and PCI-E cards instead of chips, yes.
jaaval@reddit
No, that would be the same way Dell sells chips.
intelminer@reddit
They aren't building them in the US "instead" they're building them in the US in addition to
Chipay@reddit
And if they weren't building them in the US in addition to, they would be building them in Asia instead.
intelminer@reddit
I do not know what point you're trying to make lmao
Chipay@reddit
AMD is paying more for their silicon while the competition isn't
Jimbuscus@reddit
Which means Australians and other countries get to pay the average difference, just like with the American tariffs.
silchasr@reddit
And then a little extra on top for good measure.
Jimbuscus@reddit
AUD MSRP's are slowly working their way to 200% unit price, was +50%, then +60%, now it's +75% with +100% in sight.
silchasr@reddit
Checking the prices of the Nvidia 5000 series neae launch, factoring in US - > AU conversion plus GST, GPUs where still hundreds more in comparison.
laptopAccount2@reddit
Total cost increase is 10% raise prices 20%
Twister915@reddit
Sounds like you just discovered a problem which can be solved by a tariff. That Donald guy might be onto something?
More-Ad-4503@reddit
tariffs are for developing countries to catch up to developed ones
bubblesort33@reddit (OP)
Sure. Increasing the cost of imported goods by 20% as well, by slapping a tariff on it does help make US products cost competitive. Some of that is paid by the end consumer here, and some of it might be negated by the facilities overseas reducing prices to also help alleviate the price hike here.
People always say the end consumer ends up paying all the tariffs in the end, and while that is true on paper when you look at who pays the bill, I think it also results in these other countries cutting their costs or profits.
mennydrives@reddit
Realistically they'll just sell them all as one unit and level out the margins accordingly.
opticalsensor12@reddit
Companies look to maintain their gross margins, so if the cost increases 20 percent, price has to increase 40 percent to maintain same gross margin.
soggybiscuit93@reddit
If COGS = $50 and sale price is $100
Margin = 50% or $50
If COGS increases 20%:
Cost = $60.
So if they sell for $120, they maintain a 50% gross margin and now net $60
So im confused on where the 40% is coming from?
Even just maintaining the same gross margin will increase profit when COGS increases.
GrixM@reddit
In an ideal world for them, sure, but sometimes that's not possible. If the customers are not willing to pay 40 percent more then they cannot raise the price 40 percent, simple as that.
WarEagleGo@reddit
Can you work out a simple numerical example? I do not follow your logic. Yes price will have to increase if cost increases, but where did the 40% come from?
AttyFireWood@reddit
Demand is outpacing supply, so chips that are 5-20% more expensive are better than no chips at all.
VariousAd2179@reddit
How it works is that consumers (in the US) will pay more.
Stay smart.
bananaphonepajamas@reddit
Just don't sell the made in Taiwan chips in the US.
cheapcheap1@reddit
Customers would never, ever pay for this. The fact that AMD sees market potential at all for this no doubt expensive endeavour tells me have intel (haha) that the US gov will either subsidize those domestic chips or tariff foreign ones.
Thercon_Jair@reddit
I love that I will be subsidising the tax cuts for the rich with my consumption. /s
TheHodgePodge@reddit
It will be price hike for everybody. The era of affordable good cpu is slowly fading away. Things are only gonna get worse for hardware.
INACCURATE_RESPONSE@reddit
It would be the other way around - that’s the point of tariffs, it’s supposed add costs to imports to make it price competitive to producing locally or drive investment in local industry.
Australia did it with the car industry until the whole thing went boom.
The problem is that it raises prices across the board and the customer needs to pay either way.
Pyrostemplar@reddit
Because she didn't say exactly what the title says she did..close, but not the same.
And yes, it is very unlikely that the price isn't the same.
Jaz1140@reddit
This is good for other countries. We'll take the cheaper Taiwan chips thanks
Dave10293847@reddit
It’s not actually cheaper because suppliers can’t get enough chips to make products. Supply and demand dude. Like where have you been these past few years prices are astronomical.
Pijany_Matematyk767@reddit
Well yeah, according to supply and demand increasing the supply leads to lower prices, so this should result in cheaper chips
Strazdas1@reddit
The chips are not the bottleneck.
RealThanny@reddit
It wouldn't work that way at all. It would just increase the average cost per chip, which either eats into margins or causes an overall price hike.
The chips will cost the same to the final buyer regardless of where they are made.
b3081a@reddit
The production cost of a chip is nowhere near its selling price especially for those in retail, and wafer production is only a fraction in their cost structure. Eventually it's their gross margin going from 50% to maybe 49% to pay some extra to U.S. infrastructure and workers instead of shareholders.
Dave10293847@reddit
Theoretically (and ideally) the increase in supply might make it possible to produce mid range chips again since TSMC is at least publicly restricting the most advanced process nodes from US soil. Perhaps the US could manufacture the necessary components to make a less advanced but still very capable chip. So more expensive to make, but also more accessible and available. We’ll see.
Azure-April@reddit
I would want to pay less for a US made model, I don't want that shit lmao
-transcendent-@reddit
DoD and the defense contractors will.
Candid_Report955@reddit
Lots of companies will. It's a more reliable location for production, far from mainland China.
de6u99er@reddit
I think there will be a tariff for imports and AMD is just matching the price.
The same will happen to any other imported product which will increase in price based on applied tariffs. Local producers won't produce suddenly more, they will just match the price because the are greedy.
SyrupyMolassesMMM@reddit
Ugh; I dunno about you but Id pay more for the Taiwan model…and LESS for the US model…
shockwagon@reddit
worth it for companies who dont want to wait on nvidia allocation, speed > costs right now
xmod3563@reddit
That's the freedom tax. Freedom isn't free. Millions have died for the freedom you enjoy.
BunnyGacha_@reddit
Nah it won't be worth it
RedditBoisss@reddit
I gotta feeling they aren’t just going to increase the US ones by 20 percent
Homewra@reddit
Me: not paying above 80 usd per CPU since zen3
Also me: Checking now that x3d CPUs go above 500 USD.
Yikes...
narwi@reddit
As long as us non-US-ians can buy the cheaper, non-US made chips, you can do whatever you want.
Tiny-Independent273@reddit
not worth it for consumers I assume
unknown_nut@reddit
Haa, I ain't buying shit for 4 years. Then in 4 years the stupid tariff prices become the norm, even without the stupid tariff. Screw this country.
n19htmare@reddit
It’s “worth it” for investors and shareholders. Not consumers.
soggybiscuit93@reddit
Increasing COGS to increase supply chain resilience is worth it the shareholders?
No way are shareholders demanding AMD increase their costs.
n19htmare@reddit
COGS is usually not 1:1 increase compared to what is passed on to consumers. If you still haven’t figured that out in last few years, you never will.
soggybiscuit93@reddit
Are you replying to the wrong comment? Because I never said that would be the case. Especially not when the increase to COGS would only impact \~20% of inventory and that additional cost could easily just be spread across the entire product line.
But diversification of supply chain isn't done in the interest of shareholders. The lack of supply chain diversity in the first place was due to pleasing shareholders.
Diversification and hardening of the supply chain is like an insurance policy: It's just an extra cost that hurts shareholder value if you never need that diversity, but you'll sure as hell be glad you have it if you need it.
n19htmare@reddit
Diversification and hardening of supply chain negatively impacts the stakeholders when the COST of doing business increases WITHOUT increase in source of revenue and profits.
Stability in supply chain is supposed to help LOWER costs for end user/consumers, not the other way around.
What you're thinking is how it SHOULD be when a company diversifies/solidifies it's supply, the short term cost for the company increases without impact to end users w/ goal of long term stability and options. That's when the company/stakeholders absorb the hit.
That is not what is happening here. AMD, and neither it's stakeholders will absorb the cost. They won't be negatively impacted by this but the end consumer/user will see cost increase.
soggybiscuit93@reddit
Right, so if AMD just passes the cost on to the consumers, why would this decision be made for shareholder value?
The goal is the minimum amount of stability necessary as to not negatively impact production. JIT is an example of this. The supply chain pre-COVID was stable until it wasn't. Redundancy always adds a cost.
If there ends up being no disruption of production and shipping from East Asia, then dual sourcing from the US didn't provide any shareholder value. But the point is that the future can't be predicted, and if there were to be an event to disrupt that single source, then the dual sourcing provides its value then and there.
Kinexity@reddit
If it's not at least 20% more performance (obviously it's not) then it's not worth the price hike to anyone except USA government.
DryCr1tikal@reddit
it’ll be worth the price when those those taiwan chips don’t exist anymore for certain sociopolitical reasons
No-Relationship8261@reddit
I am sure price will hike for all chips to make up for it. Including those sold not in USA. Like Europe.
Europe can't stop getting L's after all.
Kinexity@reddit
Long term EU plan is to switch to domestically made RISC-V chips so I could see this being a situation where short term loss (more expensive chips) causes long term gain (more pressure to drop out of this bullshit subsidising American chip manufacturing).
herd-u-liek-mudkips@reddit
I haven't heard about this. What's the source? Is there anything available to consumers today? I'm considering buying a laptop, and a RISC-V laptop is intriguing. Especially if it was made inside the union.
Kinexity@reddit
I don't remember the names of the programes but there was some kind of European supercomputing initiative or something like this. Start from looking for this and you should learn more.
LONG TERM. I am talking 10-15 years until we might see fully EU built supercomputer and I am not sure when it will start trickling down to consumer market.
I know Framework is cooperating with some other company to make a RISC-V laptop for developers.
Z3r0sama2017@reddit
Just let the EU put 20% tarriffs on the chips. The money might aswelll be collected as tax money for the EU instead of subsiding America.
mennydrives@reddit
This would be true if TSMC wasn't supply constrained in Taiwan.
Until the AI bubble pops, they're supply constrained AF in Taiwan, especially that they're likely STILL working through the Covid backlog. (until you can buy a Raspberry Pi CM5 at MSRP, assume they're still working through the Covid backlog)
So whatever AMD is buying from the US plant is additional supply, and given which way the wind is blowing on their CPU production, they'll be happy to get as much as possible. Epyc's margins can EASILY absorb a partial, sub-20% chip price bump.
Death2RNGesus@reddit
Except it is worth it if customers pay, and considering how much cheaper they are than NVIDIA it is likely not even going to cause customers to blink, they still end up way cheaper than NVIDIA chips.
WarEagleGo@reddit
Obviously not true, even CEO Su said
CodeMonkeyX@reddit
Yep if AMD, NVidia, RockChip, Intel, etc all have CPU's for sell they all perform the about the same, and the made in America one just costs 20% more not many people are going to buy it. I try to spend money mindfully, but to be honest that mindset is for the wealthy. Most people do not have the luxury to just spend 20% extra on things for political/moral reasons.
Vb_33@reddit
Lisa said more than 5% but less than 20%. Part of that is sending the chips to Taiwan for advanced packaging which is not yet available in the US.
idiotwithacameraYT@reddit
"it'll be worth the price hike because the cost is being pass onto the consumers"
LordRattyWatty@reddit
Who's to blame for this 'deal?'
idiotwithacameraYT@reddit
AMD and gov. Obviously.
LordRattyWatty@reddit
Who championed the act?
idiotwithacameraYT@reddit
you already know
LordRattyWatty@reddit
We both know
GOOGAMZNGPT4@reddit
AMD chips are pretty cheap already.
On the low end? A 9600x is going for $200 on Amazon, $240 isn't invalidating their market.
Enthusiasts paying $479 for a 9800X3D won't bat an eye at paying $576 - they've shown they are willing to pay 2x MSRP for high-demand low-stock chips anyway. Entusiasts aren't price sensitive.
And don't get started on the 9070 XT.
Corporations buying $5000 CPUs for datacenters, won't bat an eye at paying $6000 for the same chips - it's just a tiny bit more capital investment to fuel their AI ambitions anyway. These guys are paying millions to rake in billions. They aren't price sensitive.
Besides, there's all kinds of corporate fuckery that will be in play. Prices can remain stable, and margins shrink. Prices can go up 10% globally and other sites can 'absorb' the other costs. They can crank up the prices, blame inflation, and still be cheaper than Intel.
This really doesn't affect consumers in any measurable way. Most of you buy a ~$200 CPU once every 5 years anyway, sky is not falling.
bubblesort33@reddit (OP)
And 20% is just an "up to" estimate. Could less than 10% in some segments.
W4DER@reddit
Once US start producing the chips, you wont see any other production on the US shelves... Taiwan will be for EU and Asia
RateMyKittyPants@reddit
What they really said was Intel shit the bed and now AMD can price hike because we can
rebelSun25@reddit
Worth it to who? The shareholders?
-DonJuan@reddit
Supply chain diversification
MediocreAd8440@reddit
For a 20% price hike? I'd love to see the p/l sheet of the company you work for lmao
that_leaflet@reddit
It would definitely be worth it in the event China invades Taiwan.
someguy50@reddit
Or you know, a pandemic makes a mess of things. We saw that already
ClerkProfessional803@reddit
I'm sure Intel fabs are handing out massive discounts. Of course AMD likes higher prices, since it's mostly passed on to the consumer.
Soulphie@reddit
if its for the us only sure, but if my chips are going to be more expensive to have Made in the USA written on them, something i dont want in the first place, i will be mad about it
patriot050@reddit
Or they could take less profit. Their greed created this problem.
reddit-MT@reddit
20% appears to be the cost of paying a decent wage, having safe working conditions, and at least attempting to follow environmental regulations.
ibeerianhamhock@reddit
I mean this is the situation that has been forced on AMD and TSMC by the president ultimately. AMD doesn't have the margins in desktop to eat all of the extra cost. They're probably already reducing their margins to make it only 20% more expensive tbh.
Aleister_Growley@reddit
Guess I’m buying intel
mca1169@reddit
isn't part of the point of making chips in the US keeping prices down?
Recktion@reddit
The point of making chips is to bring jobs to the US. It was never about lower prices, no one ever said it was about lower prices.
If US made items could be cheaper they would've never been made over seas to begin with. C'mon dude.
LordRattyWatty@reddit
Also to expand our technological capabilities for production and research as well.
RealThanny@reddit
No. The point of making chips here is to avoid being entirely reliant on any foreign entity to make advanced technological products.
Nobody thinks that will be cheaper.
GodofcheeseSWE@reddit
The point is to combat the Asian dominance of the tech market
I the long run it's going to be good for the market, hopefully.
PrivateScents@reddit
Yea, to eventually bring the prices down.. Right..?
soggybiscuit93@reddit
No. The market will always optimize for maximum profitability, which oftentimes can run counter to other features a society may want, like resilience.
Consolidating production to a tiny handful of companies, many of which are in Asia, was in pursuit of optimizing costs (to an extent).
Incentivizing production in the US has nothing to do about lowering costs. And as far as "jobs" are concerned - the only value there is to make sure that certain industry knowledge and skills isn't lost. It isn't a "jobs" program, per say.
GodofcheeseSWE@reddit
We can hope
But prices generally never go down if people are willing to pay the current ones
Which is why we have terrible gpu prices
Zenith251@reddit
No, it's to stop other countries from being able to cut-off cutting-edge silicon from the US.
If you live in US, you would not want that to happen. You really wouldn't.
b3081a@reddit
It's for supply chain diversity. Even if you don't consider the situations like having COVID again or China invasion, there are other risks. For example, Taiwan is a place with frequent earthquakes. So having a backup is always a nice addition.
Lunarpeers@reddit
No??? Lmao
soggybiscuit93@reddit
Point of making chips in the US is to onshore production of a component as critical as oil for geopolitical reasons. The US expects for the next major war to be in the Pacific around Taiwan and losing access to all TSMC production would collapse the US.
qadrazit@reddit
This is absolutely brilliant. Silicon independence just for 20%??? Not 2000%?? Not 200% JUST 20?? That is outstandingly cheap
bubblesort33@reddit (OP)
5% to 20%
BinaryJay@reddit
Lately "Made in the US" just means "Try to find an alternative to buy instead" to much of the world.
Inevitable_Bar3555@reddit
I'm praying my 7800x3d never dies so I don't have to deal with buying a new cpu on this market
NonameideaonlyF@reddit
Delidding (professional work) + Undervolt + Repaste + CPU air cooler or AIO that gives you the best lowest temps possible.
Intelligent_Peace_30@reddit
Free trade is always better.
rushmc1@reddit
Note to self: Buy no more AMD products.
Deshke@reddit
aka AMD chips get 20% more expensive world wide, regardless of where they are produced
osirus35@reddit
Part of AMDs appeal was getting a better chip than Intel and at a cheaper price. I don’t see how taking away half of the appeal makes it “worth it”
sassynapoleon@reddit
People here are missing the point. His point is that 5-20% difference in cost is not that big of a deal compared to gaining supply chain resilience. COVID showed that pursuing efficiencies at all costs resulted in fragile supply chains that were devastated by any perturbation upstream. Some companies have learned this lesson and are willing to invest in some slightly sub-optimal production as a hedge.
WarEagleGo@reddit
Agree with your analysis, but want to point out that supply chain resilience can be optimal for an uncertain dynamic world (changing tariffs, natural disasters, sudden war, pandemics, etc). With rose colored glasses, one could argue that Just In Time (JIT) and other supply chain strategies optimize something for near-perfect conditions...
I think it is wrong use the word sub-optimal in your original sentence. How about
lukfi89@reddit
This is just chip manufacturing, though. What about the other parts of the supply chain, are they also building it in the US, or will they ship the silicon across the world and back?
Strazdas1@reddit
They have to have increased resilience too, but AMD does not make them so its not their job.
soggybiscuit93@reddit
Raw material supply chains, by their nature, are inherently more resilient than the most complex manufacturing process ever invented
lukfi89@reddit
I mean the subsequent steps like chip testing and packaging.
Vb_33@reddit
Packaging is being brought to the US but for now packaging can only be done in Taiwan.
sassynapoleon@reddit
I have to assume that the supply chain is global, but having multiple sources at each stage is the objective. Some stages are incredibly big investments to have redundancy for, and I imagine that this is one of them.
ResponsibleJudge3172@reddit
We aren't missing the point. Whether Lisa or Jensen Huang says it, no one wants a price hike
Popular_Tomorrow_204@reddit
Will this make the non-american produced Chips cheaper? I know that they wont be cheaper in the US, but maybe in the EU or Asia etc...
TheHodgePodge@reddit
More expensive if anything. Americans won't allow same products sold for cheap elsewhere. Prepare accordinglty. Cpus are gonna have their ngreedia moment soon it seems.
gelade1@reddit
why would that be cheaper? what makes you think they will be cheaper?
Popular_Tomorrow_204@reddit
More supply, less demand. Well we can talk about induced demand then, but even if just the US gov buys these (and contracters are obligated to use them too), there should be a huge "relief" on the supply and a drop in demand from foreign products. So less shipments to the US, therefor maybe more supply for the rest -> lower prices
TheHodgePodge@reddit
US hellbent on ruining stuffs for everybody else as always.
bad1o8o@reddit
because they will be 20% faster?
Pyrostemplar@reddit
What is missing in the headline is a bit of the phrase. IIRC what Lisa said was that the diversification in the supply chain would be worth the extra 5-20% of chip cost.
Amd has over 50% margin on these chips. If they source 20% out of the US and they are 10% more expensive, it is a 2% BOM increase in the chips.
CorValidum@reddit
Great sell them to Americans then!
BenJoeMoses@reddit
Many people are saying big beautiful chips are need to be made in America, many people are saying that we should bring it back. And we will do! I prefer onion and cheese flavored. We should never let them take our chips away, hell yeah borther! 🎇🦅🇺🇸🎆
Strazdas1@reddit
What we need here is small beautiful chips. Big ones means old, obsolete nodes :)
jeanphiltadarone@reddit
Intel is as good as dead, of course AMD is raising their price years after years.
Doikor@reddit
Offcourse they will be worth the price hike as they will bump the price globally increasing their margins by 20% outside US.
Tigeire@reddit
"extra expense was worthwhile in terms of diversifying where AMD is outsourcing its production."
"consider resiliency in the supply chain"
Reasonable_Draft1634@reddit
Remember Motorola’s phone that was made in USA and commercials running on tv every channel? Yea, me neither.
_elijahwright@reddit
how 💀
I mean you need the infrastructure here first imo. my state has seen TSMC plants grow from the ground like weeds these last few years but they only started 4nm this year. it's not really worth the price hike for now tbh, I get the importance but this is too soon
mi7chy@reddit
US made 20% for inferior node vs Taiwan made.
SoakingEggs@reddit
how? If i had the choice in anything, i always avoided Made in USA because it a lot more expensive for little to no benefit (in some cases even worse)
mysticzoom@reddit
No, they won't. Like Intel before them its AMD's turn to fuck over its customers because their competition does not exist.
NewMachineMan@reddit
Is it more expansive because of wages and/or taxes in USA are higher?
ChefLeBoef@reddit
What they actually mean is that the chips would be worth much more in all markets not just the us.
reddit_equals_censor@reddit
well i guess let's all be happy for
"copy exactly!", otherwise we'd have to avoid the usa chips like the plague lol.
vexargames@reddit
it will be really good that we have chips at all when China takes Taiwan and shuts off the supply.
PrimaryRecord5@reddit
Well it will be outsourced to India in a few years
HisDivineOrder@reddit
Since she said it's worth it for diversification, I'm happy to hear she's having AMD eat the extra cost.
After all, it's worth the extra cost apparently.
stuff7@reddit
In the end no one on the consumer side would know if the chip are made in USA or Taiwan because all they see is either made in china/malaysia due to amd removing the [diffused in country] from the ihs.
soggybiscuit93@reddit
I fully expect, once US production is fully up and running with sufficient volume, for the US government to require its PC's to use the US manufactured versions, and OEMs to respond with either specific models certified to be using the US version - or possibly even moving over their business line (Dell Pro, ThinkPads, etc.) over to the US fabs for this certification.
I also wouldn't be surprised if M365/Azure Government and AWS GovCloud switches to US made chips as well to satisfy some future regulatory requirement.
The US volume isn't enough to expect any DIY parts to move to US fabs.
Saisinko@reddit
Funny enough I’m reluctant to buy “made in USA” nowadays more than ever.