The Biden administration has been pushing chipmakers to have their foundries setup within the US. While the move to bring advanced chip production is to achieve various economic or industrial policy goals, it will also come at a cost that can affect the overall market for smartphones.
If the US succeeds in bringing chip production from major foundries like TSMC (Taiwan Semiconductor Manufacturing Company), then the average cost of smartphones could rise across the globe. This is likely due to unavoidable factors like higher wage in American jobs compared to their Asian counterparts. The world’s largest contract chipmaker, TSMC, has told investors that US chip plants will cost much more than the same plants that are situated in its home country of Taiwan.
For those unaware, the US’ CHIPS Act was designed to incentivize chipmakers to setup facilities in the US. However, the 54 billion US Dollar effort can help bring in the foundries, but it can’t make the chips cheaper. Apart from this, it would also create a widening geopolitical-technological rivalry with China. This move can affect brands like Apple, Samsung, Google, and many other OEMs in the market.
Breaking down an iPhone 14 Plus, 54 percent of the estimated 527 US Dollars manufacturing cost of the device is just the semiconductor alone. Out of this, 81 US Dollars is the cost for just the core A15 processor. Despite the chipset being designed by the Cupertino based giant, TSMC is the partner that builds this SoC. Thus, we can also affect such changes to affect Qualcomm Snapdragon chips that are made by TSMC.
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(Via)
