You are currently viewing SemiWiki as a guest which gives you limited access to the site. To view blog comments and experience other SemiWiki features you must be a registered member. Registration is fast, simple, and absolutely free so please, join our community today!
"Developed by Scotten Jones and constantly updated, The Strategic Cost and Price Model has an amazing level of detail. It goes to individual tool and process step levels. Importantly, fabless and hyperscalers worldwide trust it to put their foundries to task about wafer prices...
The final answer was: It costs TSMC less than 10% more to process a 300mm wafer in Arizona than the same wafer made in Taiwan. Where most make their mistakes is with direct and indirect labor cost differences. While there is roughly a 200% difference between the US and Taiwan. This is a head fake because today’s fabs are so automated. Labor accounts for less than 2% of total costs. It’s equipment that levels the playing field. Well over two-thirds of wafer cost is in the equipment. That’s why the overall wafer cost difference between Arizona and Taiwan comes in at just under 10%. It’s also why TSMC’s $100B decision is so brilliant."
Can't read it fully due to it being locked but I have one question:
does it includes time to make a fab? time is money ofc considering how long it took TSMC to make a Fab in Arizona vs in Taiwan and Japan.
Can't read it fully due to it being locked but I have one question:
does it includes time to make a fab? time is money ofc considering how long it took TSMC to make a Fab in Arizona vs in Taiwan and Japan.
TI can seemingly build fabs in TX almost as fast as TSMC does in Taiwan (3 years vs 3 years for a moderately bigger one). If TSMC needs 2x the time to build in the US, that is a TSMC not doing their homework problem, not a USA taking 2x the time and cost to build shells in the problem.
TI can seemingly build fabs in TX almost as fast as TSMC does in Taiwan (3 years vs 3 years for a moderately bigger one). If TSMC needs 2x the time to build in the US, that is a TSMC not doing their homework problem, not a USA taking 2x the time and cost to build shells in the problem.
Kind of hard to comment since they don't describe their methodology. If labor is only 2% of costs, what accounts for the 10% difference then?
It sounds like the authors downplay subsidies / tax incentives, and ignore non-quantifiable benefits (e.g., government support, regulatory approvals, proximity of ecosystem partners, servicing, scale, ramp-up time, talent availability, etc.).
The hypothesis seems to be: Actual regional cost differences are minimal and therefore there's little justification for foundries to charge a premium for US-fabbed chips. The unspoken part is that money alone doesn't explain the difference in manufacturing capacity by country (not sure that's what the authors intended).
TSMC Fab delays were blamed on various issues. That doesnt mean it was the cause.... it might have been a good excuse. Micron and TI have been successful in fast builds.
Scotten's numbers are spot on. If it turns out that the equipment utilization is much worse than in TW, then TSMC costs will go up. But again, Micron has proven you can do cost effective fabs in the US.
US people are capable of working as hard as Taiwanese people if they wish to. Some sites in the US have employees that value hard work and its rewards. Some have employees with other priorities. IMO, the company is the big difference in what they require
When we are just talking about shells, the main difference is roof height and strength over the litho bays and how much structural support is holding up the litho bays. It definitely adds cost and time. But we aren't talking years of extra construction time and billions of extra dollars. Kind of like building a house. It might be harder to have a 20ft vaulted ceiling vs some basic 10 ft ceiling. But from the perspective of building a house the job isn't going to be drastically more complex. Now a fab shell is far more complex than a house but the same engineering principles are likely to apply. After all we aren't building a city topping skyscraper.
My understanding is the main cost difference between different shell designs are size, number of clean room and non clean room levels, and material handling systems (or lack thereof). Location plays some part. Like how TW and JP fabs need to be more resilient to earthquakes and this robs space from the subfab and even the cleanroom to support the extra supports.
Can't read it fully due to it being locked but I have one question:
does it includes time to make a fab? time is money ofc considering how long it took TSMC to make a Fab in Arizona vs in Taiwan and Japan.
Construction overruns in terms of labor OT, additional people from Taiwan as well as supplies for hook up have been obscenely over.
Factor in all the tools sitting on the warehouse and fab waiting and waiting before they can start revenue is a cost as well. My estimate the construction and hookup was easily 2x of early estimates and that is on top of their premium geo upfront. Phase2 will be less gap but they will never match the labor and efficiency of Taiwan. There is a reason people moved the most complex manufacturing offshore. Most people have no appreciation how massive, complex and detailed even a simple thin like exhaust is.
They need far more than 10% more people for the lack of productivity of the local hire. 1/2 of the world force works 90+ hours and the other half probably average 50 at best and in that 50 are 50 to 70% as productive.
Labor is a mess, the assignees got none of what they were promised in support of localization, most rejected as too low the localization pay. Now those that are choosing to return per contract are being given bad reviews or blacklisted in finding jobs back in Taiwan and there are few Taiwan assignees that want to come even with the benefits as the American Dream has a closet of terrible things associated with it. The coerced assignees are being moved to work even harder on Phase2 and those left in Phase 1 will have the unenviable task of even fewer Assignees and many locals to run in a model ill suited for that. The America Dream in the desert, LOL
Construction overruns in terms of labor OT, additional people from Taiwan as well as supplies for hook up have been obscenely over.
Factor in all the tools sitting on the warehouse and fab waiting and waiting before they can start revenue is a cost as well. My estimate the construction and hookup was easily 2x of early estimates and that is on top of their premium geo upfront. Phase2 will be less gap but they will never match the labor and efficiency of Taiwan. There is a reason people moved the most complex manufacturing offshore. Most people have no appreciation how massive, complex and detailed even a simple thin like exhaust is.
They need far more than 10% more people for the lack of productivity of the local hire. 1/2 of the world force works 90+ hours and the other half probably average 50 at best and in that 50 are 50 to 70% as productive.
Labor is a mess, the assignees got none of what they were promised in support of localization, most rejected as too low the localization pay. Now those that are choosing to return per contract are being given bad reviews or blacklisted in finding jobs back in Taiwan and there are few Taiwan assignees that want to come even with the benefits as the American Dream has a closet of terrible things associated with it. The coerced assignees are being moved to work even harder on Phase2 and those left in Phase 1 will have the unenviable task of even fewer Assignees and many locals to run in a model ill suited for that. The America Dream in the desert, LOL
You also need to factor in all of the money TSMC received for the AZ build. They got $39B from the CHIPs Act plus local AZ money and incentives. TSMC CEO CC Wie is a skilled negotiator! One of the best I have seen in the semiconductor ecosystem!
Labor is a mess, the assignees got none of what they were promised in support of localization, most rejected as too low the localization pay. Now those that are choosing to return per contract are being given bad reviews or blacklisted in finding jobs back in Taiwan and there are few Taiwan assignees that want to come even with the benefits as the American Dream has a closet of terrible things associated with it. The coerced assignees are being moved to work even harder on Phase2 and those left in Phase 1 will have the unenviable task of even fewer Assignees and many locals to run in a model ill suited for that. The America Dream in the desert, LOL
That's grim. Where did you get that bit of info? Reading in between the lines of the media articles, I got the impression that TSMC employees (and their families) were essentially drafted into their new lives in a very foreign land that outside of the normal acclimation issues probably had some particularly unwelcoming parts.
That's grim. Where did you get that bit of info? Reading in between the lines of the media articles, I got the impression that TSMC employees (and their families) were essentially drafted into their new lives in a very foreign land that outside of the normal acclimation issues probably had some particularly unwelcoming parts.
Just need to find the right LINE chat or talk to the assignees.
The story for local hires is the same, what is promised by HR and what you get can change rapidly. All the local hires have similar experience in Taiwan. Cheap is the company and devious is HR. No question the pay is good but expect to be treated like a throw away commodity expected to be obedient and do anything your boss wants or expect to be In the dog house. Especially bad if you aren’t part of the in crowd with the big boss. Expected to be insulted and degenerated by your boss publicly
Just need to find the right LINE chat or talk to the assignees.
The story for local hires is the same, what is promised by HR and what you get can change rapidly. All the local hires have similar experience in Taiwan. Cheap is the company and devious is HR. No question the pay is good but expect to be treated like a throw away commodity expected to be obedient and do anything your boss wants or expect to be In the dog house. Especially bad if you aren’t part of the in crowd with the big boss. Expected to be insulted and degenerated by your boss publicly
The reason TSMC is throwing all sorts of roads blocks to localization is because many would leave if they could. Many of the newest hires are also trapped by visa
www.techinsights.com
