China Tariffs Will Impact the PC Components Market

One of the better parts of working in the technology industry is that it transcends politics. Most of the time. With the advent of the tariffs that have progressively been put in place by the Trump administration on goods produced in China, that has shifted. What started with an emphasis on materials like steel has now muddied the water for the PC ecosystem, and in particular, the segment that depends on individual components like DIY consumers and enthusiast gamers.

The impact of tariffs on the final pricing of products for consumers in the PC space has been discussed for months at this point, with several component vendors proactively reaching out to the media. The hope is that by talking openly about the situation and how it might affect the market that we could prepare readers for the future they are going to be a part of, limiting surprise and anger. Or at least, redirecting it towards the politicians and policy makers rather than channel partners and manufacturers.

Coverage of the tariffs has been steady, but I would argue not aggressive enough. Outlets like GamersNexus have done a great job of laying out the details while also presenting the thoughts of hardware vendors telling their side of the story. Mainstream outlets like CNBC have also touched on the subject with a lean towards the financial implications to major players like NVIDIA, AMD, and Intel.

The biggest component of concern when it comes to the tariff implementations is graphics cards. These are easily the most expensive products (on average) produced in China that will see price increases with the tariff implementation. NVIDIA and AMD will both be impacted to some degree, but it will be how they plan to work with board partners that produce, ship, and sell to the end-user that will be most interesting. It is well understood that NVIDIA and AMD make the majority of the margin in the graphics card and GPU pipeline, with companies like EVGA and ASUS making less than 10% (and supposedly MUCH less in many cases). The tariffs are technically imposed on the company that brings the goods into the US for sale, meaning that the board vendors are on the hook.

But graphics cards aren’t going to be the only casualty here. Most every level of component will have tariffs applied, from power supplies to computer chassis to motherboards. Even coolers and storage devices are on the list. This translates into higher import costs for companies like Corsair, NZXT, Gigabyte, MSI, and many others, throughout their product stacks. Expect to see higher prices that are passed on to the consumer because of these trade policy changes.

Impact of this might extend even beyond the components and companies with direct ties to the tariffed products. We saw a similar situation during the mining craze of 2018, where secondary components saw reduced demand and sales because higher prices on graphics cards were driving away upgraders and new system builders. I foresee the same thing occurring here – if the cost of graphics cards, motherboards, cases, and power supplies all go up by 10-25% in the next quarter, resulting sales of complimentary products like CPUs, memory, keyboards, and accessories could drop.

Interestingly, the tariffs in place with this third iteration of Trump’s policy do not affect complete, pre-built systems. This means that computers that ship from China with a case, GPU, power supply, etc. included and assembled are not required to pay the 25% import fees. Though not useful for large scale operations, it could be an avenue for smaller unit transactions to save.

For these vendors and manufacturers that now must balance the bottom line of their financials with the goodwill and consumer impact of big price hikes, there are only a few options they can consider. The first of which is a direct cost pass-through to the consumer. Rather than paying $400 for that new Radeon or GeForce graphics card, you should expect to see $500. Future product releases will likely include the tariffs in stated MSRPs, something that Europeans are familiar with because of VAT.

The short-term solution in the ramp up to the initial 10% tariff and the pending 25% tariff on these products was to import as much product from China prior to the tax implementation. Companies that had the capability were (and still are) ramping up production and shipping to hoard as many power supplies, cases, and motherboards as possible in stateside warehouses. But being the field that it is, technology changes quickly with new chipset, graphics processors, and designs releasing frequently. It’s near impossible to speed up development of something like a new line of graphics chips to prevent additional taxation.

A long-term option will be for these companies to move production facilities to countries other than China. Ironically, that is the goal of such a tariff, to encourage these vendors to manufacture more in the United States. But no company I spoke with, or that I have seen quoted anywhere else, has indicated that would be the best option. Instead I am hearing that board production will see increases in other Asian countries like Singapore, Vietnam, and even some increase in Taiwan. But this kind of move takes time, months at least, years perhaps.

For now, vendors appear to be pessimistic on the outlook for tariff resolution. Enthusiasts and DIY consumers are equally concerned about how this will affect them. For better or worse, this problem is much bigger than graphics cards and motherboards, and our market is simply caught up political storm of our time.

Published by

Ryan Shrout

Ryan is the founder and lead analyst at Shrout Research, consulting and advising leaders in the mobile, graphics, processors and platforms. With more than 17 years of experience evaluating and analyzing hardware and technology as the owner of PC Perspective, Ryan has a breadth of knowledge in nearly all fields of hardware including CPUs, GPUs, SoC design, memory systems, storage, graphics, displays and their integration into smartphones, laptops, PCs and VR headsets. Ryan has worked with nearly every major technology giant and their product management teams including Intel, Qualcomm, AMD, NVIDIA, MediaTek, Dell, Lenovo, Huawei, HTC, Samsung, ASUS, Oculus, Microsoft and Adobe. With a focus on in-depth and real-world testing and with nearly two decades of hands-on experience, he focuses Shrout Research on bringing valuable insight on competitive analysis, consumer product expectations and real-world experience comparisons.

10 thoughts on “China Tariffs Will Impact the PC Components Market”

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    So, here’s my dating advice – as an alternative of being judgmental, try to be curious and “in surprise.” Suppose, “Let me think about a situation where this could be thought-about appropriate.” In fact, in case you are questioning that too usually, most likely time to let this one go. There asiame are those that get pleasure from heading to singles events in individual and others who would fairly have root canal. Whereas there are individuals who date that get somewhat carried away with the method, it is very important have a basic common sense of what is finest to do in any given situation when you are meeting a stranger. In reality, all you could do get the clicking in the path is simple, “Hello.” You don’t actually require anything. You want a couple of suggestions for changing into a web based relationship warrior after a breakup and also you came at the right time in the correct place. It’s not enough to know some helpful tips on what it is best to do for a date. Spending sufficient time with one another from daily proper after work will certainly convey both nearer together and they’re going to genuinely come to know one another exceptionally nicely.

    Any new relationship past divorce can result in something good you probably have learned enough about yourself and previous experiences. Objectives are good to set because you’re feeling a sense of achievement once you have reached them. Being a gentleman will set you other than a lot of the opposite dates she’s possible had. It has no set worth and there isn’t a set intensive variety of actually like which an individual can present away. People by and large prefer to speak about themselves. More individuals complain in regards to the flakiness and the ghosting. Regardless of the stage or circumstance, courting can be difficult, complicated and anxiety-inducing – and maybe extra so when you’ve got ADHD. The question looms an increasing number of persistently in your mind, “Am I prepared up to now once more?” Maybe you’re newly single and searching for a good way to fulfill individuals. In case you aren’t able to work with a matchmaker or can’t afford one, consider asking a trusted good friend, sibling, or coworker in the event that they know any single folks they suppose could be a good match for you. You by no means know who you may meet.

  6. It is going to show that you want something else from the Ukrainian woman. So they want somebody who cares about their feelings and respect her in every method. Often, you will discover the brand new members of the relationship site on the front web page, members who have not posted their photos are seldom on the homepage it is not uncommon data men are all the time at first interested in the pretty images of the Russian brides. Other factors akin to subscription costs may make it easier to determine on a site that’s reasonably priced to you. We’re a lot better than a marriage company, just for a small month-to-month subscription our members have full entry to all the ladies enabling them to freely chat to as many members as they want and freely change contact data. It is lucky that you could search the regarding info on the web. All of us are aware that Internet is providing us a chance to fulfill with our someone special by on-line courting sites. First, with the arrival of Internet it is straightforward to communicate with them.

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    Generally it’s sufficient for a Ukrainian woman to get to know that her boyfriend simply flirted with another lady to break up with him. In the case of Ukrainian dating websites, the creators of the site hold lots of non-public data about you and also you by no means actually know how they’re using it. That is more so the case with things like religion and different matters, which may cause friction, regardless if it is a long-distance relationship or not. Parship – Greatest for individuals in search of a critical, long-time period relationship. Learn the way European dating works and what is considered taboo in the ladies’ nations to avoid unintended offenses and disrespect that may ruin your relationship. The purpose of european online resourses is to join the hearts of single women from Japanese Europe with single men from Western European nations. Meet single Ukrainian and Russian girls in a secure, snug, and romance-filled atmosphere. Lots of the one ladies from Ukraine are interested in western men.

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