Those who cut back on the investment in a power supply will have noticed that this component has become more expensive. Questions about why power supplies go up in price have not been long in coming, so we explain what the reasons are and take the opportunity to give you several tips on your purchase.
Power supplies are vital for our components to perform at peak performance. Until now, most people did not invest a lot of money in the acquisition of this component, but they could access a product with decent features at a price to match. There are several factors why power supplies have risen in price, which we are going to explain to you and give you a solution.
Why power supplies go up in price
In principle, there are several reasons why power supplies have suffered a significant increase in price. We have seen how many models have raised their initial price by € 20, a more than significant increase. If we take into account the different ranges, those € 20 can make a difference.
Before , a Gold certified font could be found between € 50 and € 80 . Unfortunately, that has gone down in history, so they usually start at € 70 with low powers .
Trump’s tariffs
The vast majority of power supplies are made in China , which is in an ” economic war ” with the United States . The President of the United States, Donald Trump , decided to increase the tariffs of many products that are imported from China.
One of the industries most affected by these new tariffs is computing, specifically the components that are manufactured in Chinese territory. The fact of how the rate hike may affect us is worrying, but we are already experiencing it: power supplies go up in price because they are components made in China , mostly.
In the short term , the consequences are clear: prices rise, demand falls. Bear in mind that in the IT sector this is a hard blow because the production chain is affected when the volume (low demand) drops considerably.
Long-term predictions are much more complicated. On the one hand, there is a theory that Trump would have raised these tariffs to move the manufacture of power supplies to the US Logically, the only beneficiary of this would be the United States, but, if so, what are the tariffs that countries impose on the United States? Here would be the question.
GIGABYTE showed the product categories that are affected by Trump’s tariff hike, which you can see in this image.
Price rises in food sources along the production chain
The production chains that we see in the power supply sector are usually made up of: factory, brand headquarters, local office, distributor, reseller and consumer.
The company orders a volume of production from the factory and the local office handles the orders that the distributors place to meet the demand of the resellers.
However, there are resellers such as Amazon , Newegg , Caseking , Alternate or PCComponentes that are large companies, so they do without intermediaries. The incoterm (international terms of trade) used between brand and reseller is usually FOB (Free On Board), which means that the product is sold as soon as it is chartered on the ship in the country of shipment (China).
This speeds up payment because shipping usually takes many weeks, but resellers get a good discount for using this incoterm. On the other hand, resellers stock up faster. The problem comes when there is a shortage of product and the reseller has to buy from the distributor , which increases the final price.
Foreign exchange
As we say, we see various currencies involved in the manufacture and sale of power supplies: Chinese yuan , dollars , etc. The parts to make the fountains are sold in yuan, but the fountains are sold in dollars. In 2017 , the exchange rate from dollars to yuan fell , increasing costs for Chinese factories.
This translates into a 5% price increase , but rarely has any brand increased prices for this reason.
Electrical component stock issues
In turn, it is more difficult to obtain coils , circuits , MOSFETs , transformers, capacitors , etc. This is due to the increase in the production of electric cars, a sector that has greatly increased the demand for these parts. This causes a significant lack of stock , having to wait a long time to obtain these parts.
You may have imagined that, faced with such high demand, the product becomes more expensive.
Inflation raises the price of supplies
Keep in mind that, as the years go by, the quality of life increases. The CPI and inflation are price indicators, but they are not the same : inflation does not rise because the CPI rises. The CPI measures certain goods and services to determine what the increase in prices is.
On the other hand, there is inflation , which is the rise in prices of an economy in general. That said, many times, the CPI is used to estimate inflation in an economy. The CPI that interests us is that of computer components, but inflation is more interesting because it is a macroeconomic measure.
With all this, we want to say that inflation has taken a toll on the fact that food supplies have increased in price. In short, it is not the main reason for this fact, but it has had some repercussion on the increase in price of the product.
Price increase on high power power supplies
Finally, there is a peculiarity in the sources of 850 W or more , since their demand is quite low . At first, manufacturers rubbed their hands after the mining boom, which would mean installing many GPUs and the need for a good source to power them.
Nobody knows what’s going to happen to mining, but resellers are being cautious, so they aren’t placing many orders from sources with considerable power.