Trump won, and his tariff plan could spell chaos for the PC market

Trump will be the next US President, and his 10% “Universal Tariff” plan is a nightmare for the semiconductor market

We have just received word that Donald Trump has won the US Presidential election. Before we get onto the topic of this article, the so-called “Trump tariff”, we would like to wish the country well after what has been a divisive election.

Now that Trump is President-Elect, we must consider the impact of his policies on our beloved PC/semiconductor industry. It remains to be seen when or if Trump will enact all his policies. Regardless, you can bet that every major manufacturer is taking these policies seriously and working to mitigate their potential impact.

During Trump’s presidential campaign, a “Universal Tariff” of 10% on all foreign imports was discussed heavily. For some nations, like China, larger universal tariffs were floated. These tariffs could have a huge impact on global trade, sparking retaliation from exporting countries and an upheaval of the global trade order. Our speciality lies within the PC/semiconductor markets, so we will only discuss the impact of these changes on these markets.

Will the US’ “Trump Tariff” impact PC hardware pricing?

Yes, almost certainly. If you look at any PC component, you will find parts from around the world. Even Intel, a US-based company, has silicon fabs in Ireland and Israel. Furthermore, their latest CPUs use TSMC 3nm silicon. Note that all of TSMC’s 3nm silicon is currently manufactured in Taiwan. Nvidia also makes heavy use of leading-edge TSMC silicon, making them dependent on Taiwanese imports.

When you look deeper at the memory chips, MOSFETs, controller chips, and other parts, you see a list of components that are primarily manufactured overseas. Beyond that, many final products are assembled outside the US and must be imported into the country. A 10% universal tariff on all imports means that all of these parts and final products will be 10% more expensive. Unless something is manufactured entirely in the US, it will be impacted by tariffs in some way, assuming they are indeed “universal”.

If these tariffs are enacted, we expect the pricing of PC components in the US to increase. Furthermore, it may hamper the US’ efforts to expand its semiconductor manufacturing base. After all, leading-edge fabs often use foreign equipment from companies like ASML. Tariffs on those components will be incredibly expensive, making it harder to build semiconductor fabs in the US. Unless there are exceptions to these tariffs, building new factories in the US will become more expensive.

Most foreign-made components cannot be replaced with US-made versions. That means that manufacturers cannot easily avoid these tariffs. The cost of these tariffs will be passed onto consumers, making things more expensive. That said, these tariffs could help US companies like Intel find 3rd party customers for their fabs.

PCs may soon get more expensive, and that may prompt a huge increase in demand when new hardware launches

We expect to see a lot of new hardware launched in early 2025. For starters, we expect to see new graphics cards from AMD, Nvidia, and Intel. If US consumers expect tariffs to be implemented soon after Trump is inaugurated on January 20th, we can expect high levels of demand as some consumers try to avoid potential tariff-related price hikes.

With Semiconductor manufacturers relying heavily on international trade, potential tariffs and counter-tariffs could hit them hard. It will take time for supply chains to change to avoid the largest tariffs. Regardless, electronics should become more expensive.

With the US being the world’s largest economy, changes there may have global consequences. This could impact the prices of products worldwide, especially if counter-tariffs against the US come into force. We will not pretend to understand how things would go down, though we should all be aware of how changes to global trade impact pricing.

You can join the discussion on the potential impact of Trump’s tariffs on the PC/semiconductor markets on the OC3D Forums.