Nvidia and different computing firms are calling on the Biden administration to decrease the price of graphics playing cards. In a number of feedback despatched to the workplace of the US Commerce Consultant (USTR), the businesses referred to as for an exclusion from the tariffs that would enhance graphics card costs by as a lot as 25%.
In October, the USTR opened comments on the extension of exclusions that got here as a part of the Trump administration’s tariffs on items imported from China. In 2020, the Trump administration prolonged tariffs to semiconductors and printed circuit boards (on this case, graphics playing cards), fueling the flames of an ongoing commerce conflict with China. These tariffs, at the very least partly, have been cited as a supply of the continuing GPU scarcity.
Graphics playing cards got an exclusion on the tariffs, however it expired on the finish of 2020. “We assist reinstating the exclusion,” a lawyer representing Nvidia said in its comment. “Efforts to create new capability in international locations that presently don’t manufacture such merchandise (such because the U.S. and Vietnam) have been unsuccessful and have been severely hampered by the fallout from COVID-19.”
HP joined Nvidia with a remark of its personal, saying that “HP strongly helps reinstatement of the exclusion.” Graphics card maker Zotac joined in as effectively, citing how tough it’s to “supply for a proper producer to supply merchandise in the US and/or in third international locations beside China.”
Tariffs are a tax on items imported from one other nation, however the nation exporting these items isn’t answerable for paying. The importer — somebody within the U.S., on this case — is on the hook for the additional value, which is normally handed right down to shoppers. Tariffs are supposed to deisincentivize buying imported merchandise by making them dearer than home merchandise.
That’s the issue, although: The U.S. doesn’t produce any graphics playing cards. As Nvidia, Zotac, and HP all level out, the provision chain for graphics playing cards is nearly completely targeted in China and Taiwan. Within the case of graphics playing cards, the tariff doesn’t punish China or Chinese language manufacturing. It simply makes graphics playing cards dearer with out a home different.
It is going to be a number of years earlier than the U.S. sees a domestically produced graphics card, if in any respect. Intel, the present champion of home semiconductor manufacturing, continues to be outsourcing its upcoming Arc Alchemist graphics playing cards to Taiwan-based chipmaker TSMC. AMD and Nvidia additionally companion with TSMC for manufacturing, as does Apple.
There’s likelihood that the USTR will lengthen an exclusion to graphics playing cards, which ought to drive down costs. The USTR says that exclusions will likely be doled out to merchandise based mostly on availability within the U.S., home capability for manufacturing, and adjustments within the provide chain since September 2018. Graphics playing cards hit all three necessities.