When your capital cost jumps to 2x or 3x the planned spend that kills projects in their tracks. I can tell you right now capital expenditures are trying to get in under the tariff wire. And getting approval for a project that WAS supposed to be 1 or 2 million and now it's 3 to six million is a LOT more difficult especially if there isn't a direct correlation to the company mission/income.Datacenters will chase cheap energy and connectivity. Those two are the largest operating costs by far. Apart from those two things, the physical location doesn't matter at all really. Tariffs only affect the capital purchase once, but energy and connectivity costs are forever.
Why would costs jump 2-3x? The tariff's don't equal that. Most enterprise equipment isn't made in China. And Taiwan backed off, so no tariffs there.When your capital cost jumps to 2x or 3x the planned spend that kills projects in their tracks. I can tell you right now capital expenditures are trying to get in under the tariff wire. And getting approval for a project that WAS supposed to be 1 or 2 million and now it's 3 to six million is a LOT more difficult especially if there isn't a direct correlation to the company mission/income.
Uncertainty, which I think is fair all things considered - some Chinese companies (audiophilia that I've noticed) have ceased sales altogether until the dust settles.Why would costs jump 2-3x?
Depends on the suppliers. I'm sure if you're already buying TAA compliant hardware your costs are going to remain somewhat stagnant. But you basically have to be on a special list to even be able to order that stuff. Painfully so.Why would costs jump 2-3x? The tariff's don't equal that. Most enterprise equipment isn't made in China. And Taiwan backed off, so no tariffs there.
This is what I'm thinking as well even though I hope it doesn't happen.Other hardware purchasers are building in cost increases. Plus welcome to a new round of supply chain issues.... Potentially.