New US Tariff Policy Variouds Based on "Chip Content" Might Boost Prices of PC Components
The new policy that the Trump administration is contemplating at this time is likely going to be very detrimental when it comes to price increases on various consumer PC products, including CPUs, GPUs, and laptops. The concept is to levy a tariff on foreign electronic devices where the cost will be the total value of semiconductor chips the foreign electronic devices contain from non-US fabrication plants...
Proposed Chip Content Tariff
It is within the policy to spur chip manufacture on American soil. Per a report from Reuters, the United States Commerce Department will place a levy on the product imported at a percentage of the value of its available chip content. This directly goes into the companies that depend on offshore fabs, like NVIDIA and Apple, but normally would use TSMC's in Taiwan for semiconductor needs.
The central objective for the chips' content analysis in a device will not, however, be the extent of operation that will track factors such as chip type, origin, and product destination. This is about motivating companies against a dual-sourcing strategy, in which the company gets its materials both from the US and other foreign facilities.
Effects on CPU and GPU Full Pricing
Most of the components that comprise a consumer PC are coming from countries like Taiwan, Thailand, and Indonesia, utilizing chips fabricated in Taiwan. Such products include most of the NVidia GeForce RTX series and AMD's Radeon or Ryzen series, hence subject to the tariffs that are being proposed.
According to previous reports, tariff rates could climb as high as 100% for companies that do not conform. While final rates are still conjectural, a 100% tariff would entail huge increases in popular part prices. Below is an estimate of how prices could change:
- AMD Ryzen 7 9800X3D: $479 to almost $958
- NVIDIA GeForce RTX 5080: $999 to approximately $1,998
- NVIDIA GeForce RTX 5090: $1,999 to around $3,998
- AMD Radeon RX 9070 XT : $599 to about $1,198
Industry Response and the Future
Both AMD and NVIDIA have been at least making strides in improving their commitments to US-based manufacturing. AMD also said to shift some of its Ryzen CPU production to the TSMC fab in Arizona. Although these measures may lessen the effect of tariffs on products, the threat of increased pricing for consumers will remain until the policies are finalized and implemented.
