Tariff Tensions Spark Surge in Graphics Card Demand as Deadline Looms
The ongoing tariff dispute between the U.S. and China has led to a stocking frenzy in the electronics supply chain. With the 90-day tariff delay ending on July 9, companies like MSI and Gigabyte are seeing a spike in demand for gaming graphics cards as they rush to secure their inventory before potential tariffs are enacted.
At their annual shareholders’ meetings, executives from MSI and Gigabyte highlighted the challenges faced in building up stock before the tariffs take effect. MSI’s Chairman, Joseph Hsu, noted the difficulty due to the late availability of newer graphics solutions and the rapid selling-out of shipments in the U.S.
Impact on Revenue and Supply Chains
The uncertainty surrounding tariffs is a major concern for the rest of the year. MSI and Gigabyte each supply about 20% of their gaming products to the U.S., but they face looming tariffs that could rise to 145% without new trade agreements. Meanwhile, a temporary 30% tariff is in place, affecting both sides until the upcoming deadline.
Strategic Adjustments in Production
As a response to the trade tensions, MSI plans to expand its production beyond China. By 2027, the company aims to establish a significant manufacturing hub in northern Taiwan while bolstering their assembly operations in California. Gigabyte is also adapting, with a new AI server system assembly facility in California expected to launch this year.
However, the strengthening of Taiwan’s currency presents additional risks to local exporters. Gigabyte’s record revenue in May reflects an industry’s push to import as much as possible before the deadline, signaling nervousness and uncertainty about future trade conditions.
