GPU Tariff Exemption Expires December 31st, Could Lead to Higher Prices for Graphics Cards

Why is it important: After unprecedented market conditions in 2021 and 2022, graphics card prices seem to have dropped to the ground recently. However, the tariff incentives introduced earlier this year are expiring at the end of the month, meaning 2023 could exacerbate price hikes on the latest GPUs introduced.

Graphics cards and other devices may face 25 percent import duties effective January 1, 2023 unless the United States Trade Representative’s (USTR) office reinstates exemptions that expire later this year. The USTR has not yet announced its decision on this matter.

The problem began when the Trump administration imposed tariffs on Chinese-made goods. In March, the USTR reinstated exemptions for hundreds of products, including printed circuit boards (PCBs), which cover devices such as motherboards and GPUs. The decision was made at the urging of manufacturers such as Nvidia, Zotec and HP, who cited the lack of GPU production outside of China.

The effect of the GPU tariff exemption has been offset by massive price inflation due to crypto mining and supply chain disruptions. These prices only returned to normal in the last few weeks after the cryptocurrency crash, with Ethereum’s move to Proof-of-Stake effectively putting an end to crypto mining.

Sources recently told industry veteran Kyle Bennett that the tariffs will return in January, indicating the USTR may not be able to reinstate the benefits. A return to these tariffs could exacerbate the significant price increases for Nvidia’s GeForce RTX 4000 series graphics cards over their RTX 3000 predecessors.

Recent analysis from 3DCenter shows that while the $1,600 flagship RTX 4090 delivers a price-performance improvement over its Ampere counterpart, the 3090, the 4080 is a worse deal than the 3080. While we have a good idea of ​​the 4070 Ti’s specs, we can’t judge about it. until we see its MSRP.

Nvidia CEO Jensen Huang has defended RTX 4000 prices by once again announcing the death of Moore’s Law. Regardless of the status of the law, recent trends in consumer equipment do not indicate a typical reduction in transistor cost. These higher costs are largely due to TSMC’s costly 4nm process.

The new tariffs will most likely not bring the market back to crypto-era prices, but they will not reduce current inflation. Vendor ploys, such as moving the end of the manufacturing process outside of China, won’t help either, because expiring exceptions include unfinished circuit boards.

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