There has been a lot of back and forth on the tariff situation, creating uncertainty in the PC market. Between the semiconductors and the other electronics used to assemble embedded computers, many critical components are sourced from tariffed nations like China, Korea, and Taiwan.

How are they impacting the embedded computer market? What are the final tariffs on these goods? Here is a complete overview.

Tariff Truce

The USA had announced enormous tariffs on China in an effort to combat the trade imbalance with the manufacturing superpower. China had responded with its own counter-tariffs to match the whopping rates. If implemented, we would have seen tariffs levied in the range of 125% to 145%.

But after negotiations, a tariff truce was called, and these unsustainable tariffs were never applied. The tariff truce, originally meant to last for 3 months, was extended for a further 3 months recently, meaning the prices are still relatively stable. Of course, China was already under significant tariffs, and those remain in place.

This means tariffs to the tune of 25-30% on PCBs, besides varying levels of tariffs on other electronic components. The rates are in line with the older tariffs in place on Chinese imports from the previous Trump presidency, and are unlikely to have much impact on prices.

What About Taiwan?

China may produce the basic electronic components used in assembling an embedded PC, but the cutting-edge semiconductor chips get manufactured in Taiwan. This didn’t use to be a problem before as Taiwan has close ties with the US, but the current tariff actions have been sweeping, targeting even long-term trade partners.

The good news is that critical industries like semiconductors were exempted (though there are new developments we will address in the next section). If the exemption is removed, we can see tariffs of 20% being applied to Taiwan exports, which will have a major impact on the pricing of new embedded PCs.

The problem is that the demand for powerful computing chips has never been higher, with the rise of AI data centers that call for servers to be built and deployed at large scales. And while the US is also working on improving its domestic industry, it will take a long time for the output to reach the required levels.

The Korean Factor

While the cutting-edge CPUs and GPUs are made in Taiwan, there are a lot of other chips that originate from South Korea instead. Things like memory and storage drives are manufactured at scale by the likes of Hynix and Samsung, powering PCs across the world.

The US administration announced 15% tariffs on South Korean exports, which while much lower than the levels threatened on China, are still a steep increase from the current 0%. Trade talks are currently underway, but it is unlikely that they can negotiate a better rate, given that this is the minimum tariff rate being applied.

And unlike the situation with Taiwan, semiconductors are not exempt from this. As a result, memory and storage modules will get pricier, which along with the supply reduction of the DDR4 technology, translates to a massive price hike.

What About the 100% Semiconductor Tariff?

Trump has recently declared his intent to impose 100% tariffs on foreign-made computer chips, causing another wave of panic. Which is understandable, since a majority of chips are made by TSMC in Taiwan and shipped to the US. Even things like memory chips (RAM) are manufactured by South Korean companies.

Fortunately, the administration has clarified that companies that have invested in US fabs are exempt from the tariff. This means big players like Hynix, Samsung, and TSMC will be able to import chips into the US without facing the 100% tariffs.

There is still some confusion around whether it applies to end products containing those chips, as a lot of boards are assembled in these locations as well, using the chipset and basic components manufactured on site.

Conclusion

The ultimate goal of the administration remains to correct the trade deficit, to which end tariffs are being leveled on every sector. For semiconductors, the development of domestic capability is especially crucial, considering the importance of this critical component for computers.

So what does it mean for companies looking to invest in embedded setups? In the short term, we are likely to see somewhat higher prices. Even if major manufacturers like TSMC manage to avoid tariffs by investing in chip fabs based in the US, the overall uncertainty and tariffs on other components will have an impact.

At the same time, the investments coming in are already bearing fruit, with multiple chip architectures being fabricated and packaged in Arizona’s new facilities. We can expect to see completely tariff-free chips coming out of these fabs in the coming years, easing the price pressure from the imports.