In another drastic change, the AMD company has now announced that its US-made Ryzen chips are to be sold with a price premium of 5-20 percent, above those in foreign countries. The announcement, publicly disclosed by its CEO Lisa Su on an industry event, tells about the rising cost of production of manufactories in the domain of semiconductor production based in the country.
Increased Costs- So Why?
The price hike is mainly occasioned by the rising labor costs and regulatory demands as well as the significant investments required to build and manage state of art chip fabrication plants in America. The new chips produced at TSMC Arizona plant meant that AMD would start shipping later this year, but with a new pricing framework.
Strategic Decisions of Supply Chain
The leadership of AMD has justified the move to expand its manufacturing freedoms to enhance its geopolitical strength and supply chain dominance. It is also considered the reaction to the worldwide changes and the growing tension in the global semiconductor supply chain that pushed AMD to reduce the reliance on those facilities that are in Asia.
Market Implications
To consumers, the pricing variance will equate to the fact that the AMD US-manufactured Ryzen CPUs--which happened to be tabbed as equally high-performance ML models as they are termed to be extremely reliable--will fetch considerably higher prices as compared to those that were manufactured in regions with operational costs way lower. The major challenge that industry analysts spell out is that the price rise would mean that the cost of doing business will rise and it raises the specter of ultimate industry shift towards domestic manufacturing and concentrated supply of essential technologies.
Although this increase in price will alienate some price-conscious consumers, AMD is sure that the change is required to support stability in the products in the long-run and sustainability of the industry in the international environment which is quite unpredictable.
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