AMD Commits to U.S. Manufacturing Expansion
Advanced Micro Devices (AMD) has announced it will begin producing its processor chips at Taiwan Semiconductor Manufacturing Company’s (TSMC) new production facility in Arizona. This marks AMD’s first domestic manufacturing operation, a strategic move aimed at enhancing supply chain resilience and responding to potential tariff changes amidst ongoing geopolitical tensions. Previously, AMD’s processor production was entirely based in TSMC’s Taiwan facilities.
AMD CEO Lisa Su confirmed this development during a visit to Taiwan on April 15, 2025, underscoring the importance of geographically diverse manufacturing capabilities. The Arizona facility will host production of AMD’s fifth-generation EPYC CPUs, specifically engineered for data centers and high-performance computing.
“Our new fifth-generation EPYC is doing very well, so we’re ready to start production,” stated Lisa Su, emphasizing the readiness and robustness of their latest generation CPUs.
The decision to manufacture chips domestically was made prior to the recent return of President Donald Trump to office. Nevertheless, Trump’s administration is currently investigating the semiconductor import sector, potentially leading to new tariffs. Such tariffs could significantly affect companies heavily reliant on international manufacturing, such as AMD. By establishing domestic production, AMD aims to mitigate the possible effects of these tariffs and strengthen its competitive position in the market.
Tech giants like Apple and Nvidia have already made similar moves, beginning chip production at TSMC’s Arizona plant. These strategic decisions reflect a broader industry trend to localize manufacturing operations, thereby reducing dependency on overseas markets and bolstering supply chain security amidst global trade uncertainties.
Strategic Moves Amid Rising U.S.-China Tensions
AMD’s shift to U.S.-based chip manufacturing occurs against a backdrop of escalating tensions between the United States and China, notably in the technology sector. Amid these tensions, President Trump announced plans to establish tariff rates on imported semiconductor products—a policy aiming to support U.S. manufacturing while addressing national security concerns.
AMD’s reliance on TSMC for its semiconductor products dates back several years, making the collaboration robust and strategically critical. TSMC, the world’s largest semiconductor foundry, has been central to AMD’s rapid growth, especially in segments like AI servers and high-performance computing markets.
“We are exploring all avenues to ensure the resilience and robustness of our semiconductor supply chain, which now includes substantial manufacturing operations within the United States,” Lisa Su remarked during a press conference at National Taiwan University.
Additionally, AMD’s recent acquisition of ZT Systems, a leading supplier of AI servers within the U.S., signals further commitment to strengthening its foothold in the American technology market. This acquisition is particularly strategic as it allows AMD to directly address growing demands for domestic AI computing infrastructure, aligning with national security interests and economic priorities.
Other semiconductor companies have similarly shifted strategies. Nvidia, another prominent semiconductor player, recently indicated plans to expand AI infrastructure manufacturing operations in Arizona and Texas in collaboration with partners such as TSMC and Foxconn, emphasizing a broader industry shift towards domestic production.
Historical Context and the Future of Semiconductor Production
Historically, the United States dominated global semiconductor production, particularly during the late 20th century. However, manufacturing has increasingly shifted overseas in recent decades, driven by cost efficiencies and strategic outsourcing primarily to countries such as Taiwan, South Korea, and China. This shift has rendered the U.S. dependent on foreign manufacturing capabilities, especially in critical sectors including computing and artificial intelligence.
Recent geopolitical tensions and the global chip shortage experienced during the COVID-19 pandemic have intensified discussions around semiconductor independence and supply chain resilience. The current U.S. administration’s focus on national security concerns related to semiconductor imports highlights the crucial role chips play in both economic and defense systems.
In response, the U.S. has actively incentivized domestic semiconductor manufacturing through policies such as the CHIPS and Science Act, signed into law in August 2022. The Act provides significant funding and support aimed at environmental sustainability, workforce development, and enhancing U.S. semiconductor manufacturing capabilities.
“Re-establishing significant semiconductor manufacturing capabilities in the U.S. is critical for both economic security and national security,” said industry analyst Mark Haran. “Companies like AMD and Nvidia are at the forefront of this important strategic shift.”
AMD’s decision to begin domestic production, coupled with its strategic acquisition of ZT Systems, positions the company prominently within this industry evolution. Such moves will likely enable AMD to more effectively navigate potential tariff impositions and supply chain disruptions, while also enhancing its capacity to respond to rising global demand for sophisticated semiconductor products.
In conclusion, AMD’s initiative to produce chips in Arizona represents not just a corporate strategy but a critical development within a larger U.S. semiconductor industry trend. Through this domestic manufacturing venture, AMD and other semiconductor companies look to build more resilient and robust supply chains, strategically positioning themselves amid changing global trade dynamics.