AMD chief Dr. Lisa Su has expressed willingness to diversify her firm's semiconductor sourcing to mitigate the after-effects of a potential conflict in Taiwan that could disrupt global supply chains. AMD sources most of its chips from the Taiwan Semiconductor Manufacturing Company (TSMC). All of TSMC's leading-edge chip fabrication facilities are located in Taiwan, with the situation becoming more precarious after the firm announced earlier this week that a crucial new plant in America would delay production by a year. Dr. Su's remarks came in an interview she gave to Nikkei in Japan on Friday as part of her trip to Asia, which has seen her stop in Taiwan for several events.
AMD Yet To Solidify Advanced Chip Manufacturing Plans Outlines CEO Dr. Lisa Su
TSMC kicked off 3-nanometer semiconductor mass production last year, joining South Korea's Samsung to become one of the few companies in the world capable of producing advanced chips. The first batch of the Taiwanese fab's latest products is believed to always head Apple's way due to less stringent technical requirements and the close partnership between the two.
On the other hand, AMD requires chips with higher technical requirements, and the firm's latest products are built using TSMC's 5-nanometer and 4-nanometers manufacturing technologies. Dr. Su's visit to Taiwan came with rumors of meeting with TSMC management to discuss a partnership for the 3-nanometer products, and so far, it appears that she is willing to consider other foundries as well.
Her talk with Nikkei revolved around AMD's plans to diversify its semiconductor supply chain and the boom in artificial intelligence. Dr. Su is quite optimistic about AI and has shared her view multiple times over the past few months. For instance, at the Adobe Summit in March, she outlined that AI could boost productivity by up to 80%. Earlier this week in Taiwan, the executive commented that the AI sector could grow to be worth $150 billion in just a couple of years.
Talking to Nikkei, Dr. Su shared that her firm was interested in considering "other manufacturing capabilities" apart from TSMC to "ensure that we [AMD] have the most resilient supply chain." A potential conflict in Taiwan is also on the executive's mind, as she commented:
The fact that there is more manufacturing being developed around the world, including in the U.S. and Japan, I think that's a good thing, We would like to use manufacturing [sites] across different geographies to give us some flexibility.
TSMC's location has been a constant cause of concern in the semiconductor industry, with the worries growing alongside the firm's stature in the global semiconductor supply chain. It contributed to Warren Buffett selling billions of dollars in shares of the firm soon after buying them as he expressed worries about geopolitics affecting the firm's operations while stressing that TSMC is one of the top companies in the world.
Mr. Buffett's initial investment in TSMC was quite indicative of his belief in the firm's future as it was his first semiconductor investment, and he is known to profit primarily by holding shares for long periods and benefitting from the corresponding price appreciation. TSMC's shares are up 31% year to date but down 7% over the past five days after a rather ominous earnings call.
A significant portion of share price appreciations in the chip industry is due to the optimism surrounding artificial intelligence. On this front, Dr. Su has made AI the "highest priority" for her firm. She believes there will be multiple winners as the industry grows since different requirements - such as training or inference - require different solutions.
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