Prices Of GPUs May Increase Next Year After US Tariff Ends On 31 December

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GPUs may soon see a price hike, particularly in the US, once this year officially comes to an end. This is because the tariff exemption that was administered by the US Trade Representative (USTR) on Chinese-made goods years ago, will be expiring on 31 December.

If the USTR doesn’t decide to reinstate that particular exemption, the prices of GPUs and other electronic goods could see an increase of as much as 25% and at the time of writing, the US government body still hasn’t uttered so as a word on the matter.

The fear of a tariff being implemented was also highlighted by source within AMD, Intel, and NVIDIA reportedly spoke to tech insider Kyle Bennett (@KyleBennett) and sort of confirming with them that their GPUs would be subjected to the dreaded import tariffs, if and when it gets implemented next year.

NVIDIA, in particular, may have anticipated this situation, which explains why the GPU brand moved its logistics centre out from Hong Kong to Taiwan; given that the island city is part of China and the other island nation “technically” isn’t, it could help the brand skip the tariff altogether.

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But that really depends on how the US Customs classifies Hong Kong these days.

The worst part is that it doesn’t look like there would be an easy way to circumvent these tariffs either; in the past, GPUs and electronics manufacturer could simply list their products as “printed circuit assemblies, constituting unfinished logic boards”, as a new tariff will essentially kill the practice.

But having said that, there is an argument being made that suggests a price hike on GPUs is warranted, if not necessary or needed, tariffs notwithstanding. As Tom’s Hardware explains, the development of GPUs made using TSMC’s N5 and 4N fabrication technologies is extremely expensive, and a physical implementation of a GPU costs north of $500 million (~RM2.2 billion). Manufacturing on one of TSMC’s N5 production nodes is potentially twice as expensive as making GPUs on TSMC’s N7 or Samsung’s 8LPP.

Production costs are also higher now than they were several years ago due to rising salaries in China and inflation. Lastly, even transportation is now more expensive than it used to be in 2019.

(Source: Tom’s Hardware, TPU)

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