Reports suggest that NVIDIA's 5090 Megadu will be up to 25% fast.
Dude, this is what I've been waiting for. Why are you waiting? You could buy like a sick gaming rig right now for just a G.
Yeah, that's so last-gen. This is gonna be worth the wait.
In other news, tariffs on electronics that are manufactured outside of the United States,
so almost all of them, are expected to result in major price hikes.
Oh no! Now what am I gonna do? Should I build a computer now or should I wait for next-gen?
That's a great question, viewer. Yes, you!
And it's one we see all the time, especially around big CPU or GPU launches.
And while the answer would normally be to plan a manageable budget for yourself
and upgrade whenever your current system is no longer meeting your needs,
with those potential tariffs inbound, things could get a little more complicated,
especially for our American friends. But there is some good news, because believe it or not,
this isn't the first time that we run into this type of consumer taxation.
So we only need to look at the recent past to understand how tariffs could impact our purchases,
be they on PC parts, washing machines, or even merch on LTT Store.
I hope things don't go down this path. I want a 50-series GPU.
But if this new tax comes into effect, now could be a really savvy time to buy a PC rather than waiting.
Let's break it down and break down this segue to our sponsor.
Reason number one to pull the trigger now is you know what you're getting.
As cliche as it sounds, until there are third-party reviews, we don't really know what's coming down the pipe.
Sometimes the pre-launch rumors end up being pretty accurate,
but other times they aren't, and it can be a pretty poopy feeling to wait,
sometimes months, for a pot at the end of the rainbow that turns out to be fool's gold.
Number two, it's Q4, baby! Tis the season for inventory management.
And as we outlined in our Holiday Buyer's Guide, you can pick up a machine that will handle any AAA game out there for less than you'd probably think.
And in our recent review of the AMD Ryzen 9800X3D,
we found that even an older AM4 and DDR4 system is still very capable of modern gaming
and can save you a ton of money, money that can be spent on a better GPU for enhanced visuals.
And guys, I know what you're gonna say. Buying an older CPU platform can limit your future upgrades, but look at this.
We asked our staff here what parts they usually upgrade before they just give in and get a whole new platform.
And while 40% said GPU, the cold hard truth is that most people don't upgrade their CPUs.
Which leads us to reason number three. How often do you really need to upgrade your PC?
Even our team of very techy, gamery folks seems to be on about a two to three year cycle.
Just enough time to buy now and hopefully wait out the future tariff storm.
Ah yes, the dreaded T-word.
To find out more about tariffs and how they might impact pricing,
I asked Elijah who wrote this video to ask Taren who has a friend
who worked in the PC hardware supply chain last time a US administration peaked at Brazil's homework
and thought, hmm, that seems like a good idea.
He explained it to me by laying out two different scenarios.
Imagine I'm Walmart. I'm buying a 59D at a bulk price of $100 and I'm going to sell them for $125.
I make a tidy profit and you get your GPU.
That's scenario one without any tariffs.
Now for scenario two, let's say a flat 50% tariff is applied to a country where I purchased the GPU from.
I reach out to order some more and there's an extra little line on my invoice.
50% of the value of what my order was.
Now I couldn't sell it for $125 even if I wanted to.
I'd be losing money. So to keep my profit, I need to sell them for $175.
But now my shareholders are upset because they see my gross margins shrink from 25% to 17%.
Okay, let's go with $187.50.
That looks terrible on a price tag. $189.99.
Now last time around, the electronics tariffs were mostly targeting goods manufactured in China,
which then resulted in manufacturers investing in factories outside of China so that they could avoid them.
But there's a little hidden cost to the consumers there as well.
Let's say I'm Foxconn now, different hat.
I drop a quarter of a bill to build a new factory in Vietnam.
There's no Chinese tariffs there, but someone still has to foot the bill.
I know, I'll just charge $125 for that GPU now.
It's less than $150, so I'm still competitive in the market.
And in no time at all, consumers will get used to paying more for the same product.
More gravy for me, baby. Obviously that's an oversimplification, but there also are examples of times when it's played out just like this.
The pre-tariff RTX 3080, for instance, launched for $700 US and had a die area,
so the size of the actual silicon chip, of 628 millimeters.
The post-tariff RTX 4080 launched for $1200 US and has a die area of just 379 millimeters.
Now some of this price increase can be traced back to external factors,
like higher wafer costs for more advanced manufacturing process nodes,
not to mention the global inflation that has taken place over the last half a decade.
But a big part of it is just plain charging more for less now that they've figured out consumers are willing to pay.
And this time around, it could be worse.
Because so many companies diversified their manufacturing out of China last time around,
there's a lot of talk amongst American policymakers about implementing import tariffs,
rather than just limiting the tariffs to the exports of a particular country.
That will result in manufacturers billing out for both their investments that they've made to diversify their manufacturing
and the tariffs that are being surrendered to the US government.
And it's not like the retailer is going to get caught holding the bag,
they're just going to mark up accordingly, and if sales volumes decline, they'll simply order less.
So now, the GPU from our example that used to cost $125 at the till is $235.
And guess who paid for it? You. On Monday, November 25th, President-elect Trump announced a 25% tariff on all goods coming from Canada as well.
We'll have to see if they actually follow through with that, but based on that announcement,
our red, white, and blue friends are going to want to order your LTT merch right now.
Now look, I'm not even going to bother reading comments on this video,
because I'm sure that some folks are going to accuse me of getting political.
But math is not political.
Math is math. And as heartless as it sounds, the math says that our standard of living in the Western world is enabled
by unfettered access to cheap overseas labor.
And if you think that moving manufacturing back is going to solve inflation or even happen at all,
I have some hard truths for you. One is that Americans don't want a lot of these jobs.
TSMC, for example, has had a heck of a time hiring for their Arizona semiconductor fab,
and for some pretty good reasons. One of the most obvious ones is the misaligned expectations of work-life balance.
Now, American workers' rights are far from perfect,
but what they are is worlds better than what you might find elsewhere around the globe.
Americans rightly expect things like limited shift times, mandated vacations,
the right to collective bargaining, etc., etc.
Another less obvious reason is the eroded pipeline of qualified applicants.
It takes decades to resolve the chicken egg dilemma and develop the steady stream of both
new talent and new jobs that makes an entire industry tick.
It's one of the reasons that our Labs team has struggled so much to hire subject matter experts.
Like if we were in South Korea, for instance, and we wanted to hire a display expert,
we would be tripping over applicants. Here? Not so much.
And it isn't just us. Ratings, for instance, has had a job posting up for a display person for ages.
Hard truth number two. Americans don't generally want to pay for American-made products.
There are exceptions, many, many exceptions.
All-American clothing even has this handy-dandy list of companies who make their products in America,
many of which are crushing it. I'm personally partial to my onshore-manufactured darn tough stocks from Vermont.
But that doesn't change that the overwhelming trend is toward bargain-basement overseas marketplaces,
with Temu surpassing shopping apps from giants like Amazon and Walmart earlier this year.
And more and more, I see an attitude of,
if it costs a few dollars more, it's a complete scam.
A sentiment that actually makes a ton of sense,
given the ongoing economic challenges that have ballooned our cost of living since,
realistically, the 1980s.
Hard truth number three, maybe the hardest one of all,
is that even if Americans wanted these jobs and were willing to pay a premium
for goods that were manufactured by their friends and neighbors,
they don't have enough neighbors. U.S. unemployment is sitting at about 4%.
It's not exactly a historic low, and it has been creeping up,
but it is well below the last sustained high that we saw during the 2008 financial crisis,
and it's not that far above the deepest historic lows of about 2.5%.
So, I don't know, maybe there's a scenario where folks want to make career moves into manufacturing roles,
but what I suspect is that most don't.
Ask yourself, would I rather do this all day?
Don't forget, it's for minimum wage or less.
So, that's the math.
There is a political conversation to be had here,
something around the deep societal change that would need to take place
in order to significantly alter the math, but that's not something I'm going to touch on.
So, let's come back to should you buy a PC right now?
Well, based on the rhetoric we're seeing so far,
it might not be a bad idea. The RTX 5090 was already rumored to hit the market at around $2,000.
If the proposed tariffs go through, that could jump to more like $2,500 for parts that are manufactured outside of China
and maybe even more for anything that's manufactured within China.
Now, NVIDIA may absorb some of this in their margins, you know, as a favor to gamers,
but they also might not,
and you could build a pretty nice, I don't know,
entire gaming machine for that much money right now.
Another X factor is, do you guys remember the last time I made a video called
Buy a PC Right Now?
That was right on the eve of a crypto boom that drove GPU prices into the stratosphere for years.
Well, guess what's booming again right now?
Look, if you don't have the money at the moment,
or you want to hold out for next gen, don't worry too much.
This all might end up being a nothing burger, but if you were waiting for the right moment to strike,
electronics are pretty affordable out there right now,
and I expect that game developers are going to be targeting current hardware
for quite a few years while we wait for a new generation of consoles.
So, back 5090 probably won't be needed for a while.
You know what we will need though, is this segue to our sponsor.
If you guys enjoyed this video and you want to buy some parts right now,
why not check out our Holiday Buyer's Guide. It's less of a holiday guide and more of just a buyer's guide.
We cover four different price points and give you a really good starting point
for how to configure a great gaming PC.