Wednesday , July 28 2021

NVIDIA RTX Series MSRP and soon to increase do-it-yourself PC costs



I have to admit that something went wrong, while my title is related to NVIDIA's RTX series MSRP, this article actually has very little to do with NVIDIA; because the primary factors that hinder the levels of MSRP promised by Jensen actually have nothing to do with them. This story will go into one of the biggest problems that prevents AIB (Add-in-Boards) partners from getting MSRP prices and what it has to do with President Trump's commercial rates.

AIB: Reaching NVIDIA RTX MSRP with US commercial rates is not possible in the short term, the cost of most PC parts will increase soon

This article describes in detail the essence of the conversations I had with a group of technophile birds who had suddenly taken to the windowsill; nothing has been changed, except that the term AIC (Add-in-Card) has been modified in AIB (Add-in-Board) to make it in line with our editorial policy. He revealed one of the main reasons why Jensen's MSRP will not materialize in the near future and the cost of creating PCs – known as the do-it-yourself PC market – is about to increase. The reason has a lot to do with the US President Trump's commercial tariffs.

Our story begins with how the PC market is structured right now. For the purposes of our history, we can divide them into two parts: the component market and the prefabricated market. The former is usually referred to as the do-it-yourself sector, while the latter is what is seen with OEMs and system combos. Most PC enthusiasts will be part of the DIY market because building one's PC is half the fun of owning one. Usually when starting a PC product, it is initially above MSRP, but as economies of scale grow and companies exceed the learning curve, the cost drops. Unfortunately, however, PC components are part of the commercial tariff that President Trump has recently applied to China. Before going further, let's go over some details:

… c & # 39; is a 10% tariff that has an impact of $ 200 billion of assets that will take effect on 10/1/2018. Every Monday there is an update on whether there is progress made by the United States and China in the negotiations. If the fare takes effect on 10/1, then […] I would try to move the assembly and test to Taiwan in order to avoid the tariff, but most likely there would be to reject shipping delivery times or raise prices while they get everything sorted out – Red feathered bird.

Basically, it means that all the do-it-yourself parts inserted into the PC will be taxed on the rate proposed by President Trump. It is worth noting here that the rates do not cover pre-built systems and laptops – only the individual parts – so the cost of business for most companies will not increase unless you are in the data center construction business. Since graphics cards such as the NVIDIA RTX series are usually shipped on a stand-alone basis to players, they will be taxed at AIB level and AIB will then transfer that cost to you, the customer. At a proposed rate of 10%, the selling price of the PC parts (at least in the short term) will increase proportionately.

[we] I'm sure everything [of our] the products will be affected by the rate tax. It's not safe right now what it will be. – Bird with blue feathers.

NVIDIA RTX cards will be deadlocked at this fare and all of its AIBs will be affected; therefore the natural price curve will no longer apply. Instead of the price that will fall over time, it is now very likely that the cost can actually increase. This is because the current price does not include the impact of the tariffs – so much so that I have confirmed. There is much uncertainty about how much the rates will affect prices but for RTX, the estimates are an increase of $ 100-200 compared to the market price. The rate should go live on October 1, 2018 in a few weeks. Together with the GPUs, other PC parts shipped from China will be hit, which includes virtually all components used in a standard build.

Regarding the rates, [President] Trump does not want China to continue to have an advantage over US production with their 2025 17% factory tax credit made in China, so it's hitting them with rates. […] need to get through the program and move the assembly out of China because it does not seem like an agreement to end the rates will come soon. – Bird with orange feathers.

The AIBs have two options here: they can pay the fare (and shift the cost to the customer) or they can move their business from China to another country that is not currently fighting with the United States. The most likely candidate for this is Taiwan. Because many of the AIBs have their headquarters in Taiwan, it is the logical place to move operations – and we have confirmation that at least 5 of Taiwan's major AIBs will do so. At the same time, OEMs and ODMs are transferring their operations to the Mexican free trade zone, where they can obtain systems assembled and shipped to the United States instead of China.

For a minimal cost, Mexico would be the best option ever since […] HQs are already in Taiwan, it makes more sense to shift their assembly and test their appearance as Taiwan-based memory OEMs are already doing.

We'll just have to have desktops built in Mexico and shipped as otherwise the costs will be $ 100-$ 200 higher on RTX GPUs. – Feathered teal bird.

All this, however, takes time and dollars, which means that in the short term, if the tariff is applied, companies will have no choice but to transfer to them that cost: the consumer. Even companies that cross the curve and are able to move their operations in a ready way will probably want to pocket the margin while everyone else agrees.

For SSD and RAM memory, ODM like Geil, Team Group and ADATA already test and ship from Taiwan thus avoiding the tariffs. – Bird with red feathers.

At the same time, some manufacturers already operating in Taiwan will be able to benefit in a radical way from the tariff because the supply chains of the competitors are suddenly interrupted. After the fare will be passed, Geil, Team Group and ADATA, for example, will be in the enviable position to decide whether to increase their retail prices and cash in the delicious margin or simply enjoy the predatory prices that will automatically translate as a result of their competitors increasing prices to adjust to the fare while they do not. In any case, it appears that the operations will not move to the United States.

If the rate has passed as it is on October 1, pre-built systems will suddenly become less expensive on the market as they skip rates completely. It should also make the purchase of PC parts expensive, unless the AIBs decide to subsidize costs while moving their businesses out of China. This is certainly a possibility, but I think it is unlikely. In any case, it is clear that you will not see the selling price of the NVIDIA RTX graphics cards coming down soon. At best, you can expect price levels to remain the same.

The silver coating here, of course, will be Pascal inventory. Since the AIBs are liquidating them at a discount, they will suddenly represent a much higher value than before (assuming they do not raise prices here as a way to subsidize RTX) and would be a great deal for PC builders. do-it-yourself. One thing is certain however, on face value, it seems that PC building is going to become a more expensive hobby.



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