Graphics Card Manufacturing Being Moved From China in Bid to Escape Import Tariffs - Price to Increase 5-10%

[Raevenlord]

The trade war between the US and China has been raging for a while now, and graphics cards are a minimal part of the goods affected. However, these are some of the most sought-after products in the hardware community, and thus deserving of special attention. Added tariffs, however, will either a) be absorbed by companies, or b) be passed on to customers at increased retail pricing. Since companies don't want to reduce their profit margin, and know consumers will buy less product at higher prices, steps are being taken by AIB (Add In Board) partners from both AMD and NVIDIA in moving graphics card manufacturing out of China.

Options being most seriously considered and acted upon stand as Taiwan and Mexico, where the lack of any additional tariff, added to relatively cheap labor, would allow manufacturers to keep operating costs relatively stable - and thus end user pricing. However, while this search for alternate manufacturing locations continues, the tariffs are already being pressed upon graphics cards makers, and it's expected that pricing of graphics cards will be facing increases of 5-10% in the coming months. As if we needed additional price increases in some old (and especially new) product lines...



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[Mighty-Lu-Bu]

How is there going to be a price increase if they are moving away from China?

 

[Vayra86]

How is there going to be a price increase if they are moving away from China?

More expensive labor and probably also fabs

 

[Mighty-Lu-Bu]

More expensive labor and probably also fabs

Yeah, but it said if they moved to Mexico or Taiwan there wouldn't be any price increases. The price increases right now are because of tariffs imposed by China right?

 

[Vayra86]

Yeah, but it said if they moved to Mexico or Taiwan there wouldn't be any price increases. The price increases right now are because of tariffs imposed by China right?

Well I doubt that to be honest... Cost will still likely be higher, new deals have to be made, etc. And yes, thats what the piece said, as it stands right now... but then I don't understand your question

 

[DRDNA]

Super glad to see that the Tariffs are already working and manufactures are moving...super bummed that the people of China (not their government) will probably end up hurting a bit over this....

 

[newtekie1]

Yeah, but it said if they moved to Mexico or Taiwan there wouldn't be any price increases. The price increases right now are because of tariffs imposed by China right?

Labor in both of those locations would be higher than in China. Plus there is the cost of setting up tooling at the new locations.

 

[AnarchoPrimitiv]

The Majority of the PC Community: "We don't care what labor force the AIBs have to exploit, what laws they have to circumvent, or what environmental regulations they have to sidestep, as long as we get our videocards and other hardware at the prices we want in order to have the largest epeen, we don't care what suffering and destruction is caused in its wake."

 

[Manu_PT]

PlayStation 5 will be such a hit..

 

[TheLostSwede]

Labor in both of those locations would be higher than in China. Plus there is the cost of setting up tooling at the new locations.

Or not. You clearly haven't kept up with wage increases in the PRC over the past five years or so. Labour costs in the ROC/Taiwan are actually no higher and in some instances lower than in the PRC. On top of that, most factory labour in the ROC/Taiwan are either from the Philippines or other south east Asian countries and are paid lower wages than the locals. I can't make any claims for Mexico, as I don't know what the labour costs are there.

The Majority of the PC Community: "We don't care what labor force the AIBs have to exploit, what laws they have to circumvent, or what environmental regulations they have to sidestep, as long as we get our videocards and other hardware at the prices we want in order to have the largest epeen, we don't care what suffering and destruction is caused in its wake."

I take it you've been to a lot of production factories for PC components then? You clearly have a lot of inside insight, why don't you share it with us, so we can make more educated purchasing decisions?

 

[DeathtoGnomes]

If comes down to it, the mass exodus of manufacturers from China can only be blamed on China's government. Normal business practice there is to steal technology before any US companies can even do business there, which usually becomes cheap knock-offs.

I'm all for manufacturing leaving China.

 

[qubit]

Trump continues to do his bit to help the American public by making them pay more for their goods, or put another way, making them a little poorer.

 

[DeathtoGnomes]

Trump continues to do his bit to help the American public by making them pay more for their goods, or put another way, making them a little poorer.

past trade agreements are to blame more than Trumps attempt to have a more fair agreement.

 

[TheLostSwede]

past trade agreements are to blame more than Trumps attempt to have a more fair agreement.

Fairness depends on which side of the fence you stand...

 

[Ahhzz]

I wonder who will end up making more money from this, or who benefits from it, and who will pay more out of their pockets....

 

[medi01]

Last time I've checked TSMC was in Taiwan.

Of course you still have to assemble things and yada yada, but a number of items I've got were done somewhere else, e.g. Malaysia.

 

[xkm1948]

Would the build quality change once moved to a new country? I figure training of new workers and tooling of machines might take some time

 

[TheLostSwede]

Would the build quality change once moved to a new country? I figure training of new workers and tooling of machines might take some time

You are aware that China is not the only country in the world that makes stuff, right? It would be quite easy to move the production to Taiwan, Vietnam, Thailand or Malaysia to mention a few places where there are factories capable of making graphics cards. Gigabyte still makes motherboards in Taiwan and there are plenty of others that could adapt their production lines to make graphics cards. Sure, some are smaller manufacturers, but there has already been a trickle of companies moving back to Taiwan from China, which means that there has already been an increase in production facilities. Admittedly this is something that's happened over the past couple of years and it's not how it used to be a decade ago or so.

The short version is, there would be no quality change, nor would you have train staff, as they already know how to do this stuff.

 

[Casecutter]

Trump continues to do his bit to help the American public by making them pay more for their goods, or put another way, making them a little poorer.

Wait till you do your 2018 taxes...

Would the build quality change once moved to a new country? I figure training of new workers and tooling of machines might take some time

If it goes to Mexico my experience would be yes, I'd be looking to buy now.

 

[Ahhzz]

You are aware that China is not the only country in the world that makes stuff, right? It would be quite easy to move the production to Taiwan, Vietnam, Thailand or Malaysia to mention a few places where there are factories capable of making graphics cards. Gigabyte still makes motherboards in Taiwan and there are plenty of others that could adapt their production lines to make graphics cards. Sure, some are smaller manufacturers, but there has already been a trickle of companies moving back to Taiwan from China, which means that there has already been an increase in production facilities. Admittedly this is something that's happened over the past couple of years and it's not how it used to be a decade ago or so.

The short version is, there would be no quality change, nor would you have train staff, as they already know how to do this stuff.

Actually, I disagree. You would have to retrain staff, unless the division was already processing that hardware. For the ones you mention, like Gigabyte, who make motherboards in TW, but not video cards, it might be slightly easier to relocate personnel, but you'd still have to retool equipment, meaning an increase in cost, meaning an increase in price to the end-users.

 

[Deleted member 158293]

Companies move to where it's cheaper, really simple.

USD being used as a reserve currency in many parts of the world assures us the U.S.A. cannot be that place due to value of the USD alone.

China or another place doesn't matter in the end. Aside from political epeen it amounts to a zero sum gain for any given country, and tariffs raise the cost of living overall.

 

[Basard]

I used to work on a surface mount line here in Wisconsin.... made boards for Lucent, Atari, etc... my mom worked at the same place for 20+ years. When they opened a plant in another country to cut costs, the American companies spent a lot more time on rework coming from the other countries.

I would gladly pay an extea 20% for a card that was made from mostly US components and manufacturing.

 

[Deleted member 158293]

Exactly, that extra 20% would contribute to increasing the cost of living. Now multiply that by dozens of other products.

 

[Steevo]

Exactly, that extra 20% would contribute to increasing the cost of living. Now multiply that by dozens of other products.

A larger tax base and economy of scale are both things that will help control prices, and increase the standard of living so maybe Detroit wouldn't look like a shithole, and the poor there would benefit.

Or you could replace Detroit with many communities hit hard by manufacturing outsourcing, plus we have the EPA to help ensure the environment they care little for in other countries is not damaged by then use of cheaper chemicals, no recapture or other controls in place to prevent ecological disaster.

But I suppose to some it is wrong to want your own country to succeed in buying products they make for themselves.

 

[R0H1T]

I wonder who will end up making more money from this, or who benefits from it, and who will pay more out of their pockets....

As always the "big bad" corporations & their political lackeys

A larger tax base and economy of scale are both things that will help control prices, and increase the standard of living so maybe Detroit wouldn't look like a shithole, and the poor there would benefit.

Wait what, the jobs aren't coming back to the US in case you missed it