TSMC is all set to start manufacturing chips from its latest cutting edge semiconductor site that it is situated in the US. Although, it appears that the pricing for these advanced chips will be noticeably more expensive than the ones it makes in its home market of Taiwan.

TSMC’s US made chips are more expensive than their Taiwanese counterparts

For those unaware, TSMC (Taiwan Semiconductor Manufacturing Company) is the world’s largest contract chipmaker and usually made chips for various tech giants from its facility in Taiwan. However, the new chips that will be manufactured in the US will be around 30 percent more expansive than its ‘home made’ counterparts, as per a DigiTimes report. The reason for this move from the company is due to the higher cost of its operations in the US.

According to the new report, TSMC’s N4 and N5 process (4nm and 5nm respectively) that will be manufactured in the US will likely be between 20 percent to 30 percent higher. This isn’t surprising since the new site will carry heftier operations costs. The same can be expected from its new plant in Japan where it setup a semiconductor manufacturing site to build less advanced N28/N22 and N16/N12 process nodes. These chips will cost around 10 to 15 percent more than the same chips made in Taiwan.

The report adds that these price hikes are being made to maintain the company’s 53 percent margin rate. In other words, it has to raise the cost to clients to ensure its own profits. It remains to be seen how the customers of TSMC, which includes the likes on AMD, Qualcomm, Apple, and others would offset this rise in cost in their own products. Notably, this news also arrives as the company eyes a 15 billion US Dollars incentive in the US.

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TSMC, the world’s largest contract chipmaker, will reportedly start the production of the Intel Core i3 processors on its 5nm process. Intel has outsourced its entry level chip series to TSMC, with production beginning later this year.

According to an EENewsEuropre report, a market analysis from Trendforce revealed that the Taiwan Semiconductor Manufacturing Company is set to start production of the Intel Core i3 processors in the second half of 2021. This arrives as Intel still struggles with its leading edge process technology with 10nm and 7nm processes. After the Core i3, Intel is expected to also outsource the production of its mid range and high end CPUs to TSMC as well, through its 3nm process in the second half of 2022.

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Intel has already been outsourcing the production of a significant part of its non CPU based chips to TSMC and UMC. Notably, the shift to TSMC also follows AMD, which has taken advantage of the chipmakers 7nm process and has improved its standing in the PC market. At the moment, team red holds a superior position thanks to TSMC’s 7nm process. So, the move from team blue could have it also rival AMD better in the desktop PC market and regain lost market share.

Unfortunately, Trendforce did not mention the source of this claim and the report arrives as a result of its investigation. In other words, this is still an unconfirmed report so take it with a pinch of salt for now. So stay tuned, as we will be providing more updates when additional information is available.

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Taiwan’s TSMC is already moving towards the next-gen 3nm semiconductor chip production. Apart from Major players like Apple and other Chinese smartphone companies, it is also attracting giants like Intel. After witnessing record-high revenues in multiple instances, it has now posted the Fourth Quarter Positive revenue report.

According to TSMC’s official press release, it has garnered $12.68 billion as the Q4 2020 revenue. This is a whopping 22% YoY(Year-over-Year) jump from 2019. Last year, it posted a revenue of $12.14 billion in Q4 revenue. What is interesting here is that 20% of the 2020’s Q4 revenue is from 5-nm chipsets.

This is 12% up from the 8% contribution last year. Anyway, TSMC says that its other 7nm and 16nm accounts for 29% and 13% of Q4 2020 revenue respectively.  From this, it is clear that the company’s 5nm chipsets have yielded more revenue than expected.

EDITOR’S PICK: Samsung gambles with a $116 billion investment to catch up with TSMC by 2022

If you recall, TSMC began the year with a 35% revenue contribution from 7nm in Q4 2019 report. With the chipsets like 5nm Dimensity 1000+, Apple’s 5nm A14 Bionic(iPhone 12 series), and the latest Snapdragon 888 SoC, it has shifted over to 5nm. That said, this  Q4 revenue is also a 4.4% QoQ increase from Q3 2020.

Anyway, TSMC’s forecasts for 2021 looks even better. It has already filled up the gaps left by Huawei with MediaTek 5nm and now Apple for 3nm. In fact, the company’s first contract for 3nm chips is to Apple, and trial production is already underway.

Accordingly, TSMC also expects that its Q1 2021(First Quarter) revenue will be between $12.7-$13 billion. Let’s join together in wishing the Taiwanese semiconductor giant a successful 2021 outing.

UP NEXT: MediaTek becomes TSMC’s third-largest customer after boom in mobile chip sales

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