**Washington**: US PC manufacturers, including Dell and HP, increasingly shift production to countries like Vietnam to mitigate costs from new tariffs on Chinese components. Smaller firms, such as Puget Systems, face challenges in adapting and may raise prices for customers in response to rising component costs.
PC manufacturers in the United States are taking increasingly urgent steps to lessen their dependence on hardware produced in China, a trend that has been developing over recent years. This diversification effort comes against a backdrop of new U.S. government-imposed tariffs that have escalated the costs of computer components. Major players in the industry, including Dell and HP, have begun shifting their production to countries such as Vietnam, which is not affected by these tariffs; however, smaller system integrators face greater challenges in adjusting their supply chains.
The situation has become more precarious for smaller companies like Puget Systems, which recently addressed the implications of these taxes in a blog post. The company noted that while it can absorb some initial increases in costs associated with tariffs, it ultimately must relay higher prices to its customers. Jon Bach, president of Puget Systems, explained in the blog, “We absorb initial cost changes on many components… and absorb differences otherwise. This reduces noise and prevents us from making many nickel-and-dime changes.”
Effective from April 1, 2025, Puget Systems plans to implement adjustments in pricing based on the latest component costs. Of particular concern are graphics cards and accelerators, which are projected to see a price rise of 10% despite already being subject to a 20% tariff. This price could escalate further, possibly reaching 45%, depending on potential changes in tariff policy, according to the warnings issued by Puget.
Other components are similarly affected, with network and storage controllers, as well as chassis and power supplies, set to increase by 20%. CPU coolers and fans are also expected to rise by approximately 20%, although their influence on overall system pricing will be minimal. Notably, the prices of SSDs and hard drives are anticipated to increase by about 10%, although this is primarily due to shifts within the broader supply network rather than direct tariffs on key components.
While motherboards will initially see no price adjustments due to their varied sourcing, the approach will ultimately depend on how original design manufacturers react to the changing tariff landscape. Conversely, CPUs remain unaffected as most are sourced from outside China.
However, the broader market environment has introduced complexities, with some suppliers increasing their prices more than might be warranted, taking advantage of the uncertainty to boost revenues. This phenomenon is prevalent throughout numerous industries, given the multilayered nature of supply chains that complicates the prediction of costs.
Puget Systems has also emphasised that its service costs, such as warranties, will stay stable, as any adjustments in this area are typically motivated by internal business expenses tied to factors like inflation and staffing.
There remains a notion of potential future relief if suppliers decide to lower their prices, although any such savings would be realised at a later date. In the interim, the company is stockpiling hardware to mitigate shortages and postpone future price hikes. Their strong relationships with suppliers and manufacturing partners also facilitate access to timely information, allowing them to adapt proactively.
Despite these efforts, the evolving circumstances of the market mean that Puget will eventually have to confront higher costs. At that juncture, the company will have no choice but to pass those costs on to customers. For now, Puget Systems advises customers to communicate their upcoming needs and to consider early purchases to accommodate anticipated price increases.
Source: Noah Wire Services
Subscribe to Industry Updates
