7 ms·

Small U.S. town, big company. Can it weather the tariff Blizzard? (Digi-Key) (2025)

62 points by upofadown 7mo ago

rcxdude 7mo ago
It's hard to overstate how screwed hardware design and prototyping would be if companies like digi-key went under. There's only a few electronics distributors like them around and most of them are centered in the US.
- 0_____0 7mo ago
  If we lost Digikey, Mouser, and AVNET, it would be catastrophic. Entire US engineering divisions would leave for Shenzhen.
  - nine-one-two 7mo ago
    What about farnell and arrow?
    - joezydeco 7mo ago
      Be careful with Arrow. They like to ask what you're working on and if they discover an opportunity to bid on the same work they'll undercut you.
      - elevation 7mo ago
        How would Arrow undercut you? An R&D firm I know is constantly spinning low volume prototype designs with wildly different BOMs; they treat Arrow reps like North Korean spies. But another crank-turning design firm I know trusts Arrow to do BOM reviews because of how many times they’ve come through with a reel of hard-to-find parts, making a design manufacturable in a pinch, unlocking sales. The exact same Arrow rep serves both firms, I’ve never figured out why he is treated so differently.
        joezydeco 7mo ago
        I was in the first type of firm. We were working on an IoT edge device for a large restaurant chain as a subcontractor to an equipment company. Arrow figured out what the project was and who the end customer was and approached them directly with a presentation on their in-house design services and fabrication. Skipping the OEM allowed them to undercut us on price and schedule.
markus_zhang 7mo ago
Does North America have some supply of those electronics components, or are we totally depending on Asian producers? I assume if prices hike up it will improve local production — or it was suggested since the introduction of more tariffs.
sethops1 7mo ago
When I order from Mouser (a Digi-key competitor based in Dallas) they plainly charge a 10-15% tariff fee. I'm struggling to understand why this solution isn't obvious. You have to pass the cost onto the consumer, or your margins dwindle. It's trivial math. > People are also having to intervene in once-automated tasks. Thousands of orders that used to auto-flow directly to the warehouse floor for same-day shipping now often miscalculate tariff costs. Charge a blanket tariff fee like Mouser.
- markus_zhang 7mo ago
  Yeah that’s what I thought too. I think people are find with some 50-100% hike of prices on ham radios, oscilloscopes, and even phones, if local production starts to appear.
  - analognoise 7mo ago
    What lol no they’re not. None of those benefits of a price hike go to American workers. They get low wage factory jobs, not old school pension jobs, and all their stuff goes up in price? Laughable. I doubt Americans won’t even pay 5% more to get stuff made in the USA.
    - markus_zhang 7mo ago
      Ah OK, so when do we see production coming back to North America? On the other hand, didn't TMSC and other manufacturers plan to open a few spots in the US?
      - mindslight 7mo ago
        Perhaps after the incompetent performative fascists are evicted, all of the structure fires they wantonly started have been put out, and there is some halfway-competent administration that appreciates the scale of the problem we are dealing with. Tariffs would have helped 20 years ago, but here they're basically just a wistful dementia echo of something that could have been. Applying a policy that's decades out of date merely further strangles American industry. This article is a great example if you actually examine the details of the situation - Digikey is an input to the types of domestic manufacturing that actually employs labor, yet blanket tariffs simply make them even less competitive.
AlotOfReading 7mo ago
I've only seen a small portion of the chaos from my side of the market, but that's been chaotic enough. All of this chaos has actually slowed down our US manufacturing buildout. We'd like to build US factories, but we're having to slow them because of the uncertainty. A foreign factory only has the uncertainty on the US import/export, while a US factory has uncertainty on all imports/exports.
- hedora 7mo ago
  Anecdotes are not data, so here's some data: https://fred.stlouisfed.org/series/C307RC1Q027SBEA https://fred.stlouisfed.org/series/C307RC1Q027SBEA US Factory build out investment increased from $80B/year to $240B/year under Biden. Trump's economic policy has managed to undo $30B of that so far, and the trend is accelerating.
  - HPMOR 7mo ago
    Anecdotes __are__ data. How much weight you ascribe to it as being representative is different. But you cannot disqualify it as 'not data'. It is usually a leading indicator of what could potentially show up in these more robust datasets.
  - PearlRiver 7mo ago
    Meanwhile China has a 1200 billion trade surplus. They are flooding the world with cheap Chinese shit despite the bloviating orange.
    - hedora 7mo ago
      In other news, we’re still trying to backfill a reason for the Iran War. One theory is that we’ll starve China for oil, so their navy won’t be able to hold Taiwan. (Projections show the US losing a war like that badly due to them have orders of magnitude more naval yards than us.) Anyway, while enumerating all the ways in which that is a dumb plan, it occurred to me that the intentional slowdown in EV and solar uptake in the US is turning a manufacturing gap into an actual present day strategic gap. China imports a lot of oil, but, as a percentage of their economy, they are way less dependent on fossil fuels than us, and tariffs on solar/batteries are basically equivalent to us shipping them free energy production and distribution infrastructure.
throwup238 7mo ago
Should note that this article is from April 2025. Digikey sruvives and the tariffs are supposed to be refunded.
- Xylakant 7mo ago
  Even if tariffs are refunded at some point, the cost of implementing and managing the tariffs, list sales, lost opportunities and so on are not. Nor is the cost of recovering the tariffs from the government.
  - downrightmike 7mo ago
    Credit card and banks should be able to manage the transactions, they keep records for years. If they were smart, they'd be pushing to get the deal and a massive fee
    - Xylakant 7mo ago
      Neither bank nor credit card companies can possibly manage the tariff question for any party. Tariffs get charged on the goods that you import and depend on what specifically you import. Banks manage the financial transaction, but have no specific knowledge what goods you're paying for and at what rate they are subject to tariffs or taxes.
- kennywinker 7mo ago
  The supreme court overturned the emergency act tariffs, but trump immediately used another statute to re-instate tariffs (effective for six months, anyway). For china, the supreme court ruling was effectively a 5% reduction in tariffs. The situation remains dumb. https://www.china-briefing.com/news/us-china-tariff-rates-2025/ https://www.china-briefing.com/news/us-china-tariff-rates-20... (Url says 2025 but has been updated continuously)
RRWagner 7mo ago
It seems that no one ever mentions that every dollar given up to tariffs is that much less for growing staff, equipment, facility and R&D expansion. It's literally a drag on the entire GDP and ecomomic growth. More subtle is that every dollar saved in buying components from China is more money for all of the forementioned.
- longislandguido 7mo ago
  Lol DigiKey has been itemizing tariffs for years. They're not "giving up" any money; it's literally an extra line item on your invoice. For the same reason when small local businesses charge you a 3% service fee to use credit; they're not giving up that money because you wouldn't have been charged it otherwise.
  - AlotOfReading 7mo ago
    If you read the article, you'll see the paragraphs about all the paperwork to set up a FTZ, the delays in fixing broken/changing tariff calculations, and the fact that some of the other parties involved simply aren't paying their share of the costs. All of those affect digikey's costs. The parent's point also applies to the companies buying product. Every dollar they spend on tariff line items is another dollar they're not sending back into the economy via expansion and wages.
deleted 7mo ago
[deleted]
takahitoyoneda 7mo ago
[flagged]
nine-one-two 7mo ago
Anyone who works in the semi industry has been hearing management try to be politically correct when trying to explain how badly tariffs are screwing everyone over every quarter. Tying themselves in knots to avoid saying how idiotic the trump administration is. And here we are trying to wait him out until the us gets a president with a brain. Good luck I hope all can outlast this.
grim_io 7mo ago
If only the people responsible for the tariffs, who miss no chance to (miss)quote Reagan, would take the time to listen to his actual words regarding tariffs https://www.youtube.com/watch?v=5t5QK03KXPc https://www.youtube.com/watch?v=5t5QK03KXPc
pjdesno 7mo ago
I remember ordering parts from Digi-Key in 1980 or so when I was in high school. The catalog was less than 1/4 inch thick, and listed various surplus things on the back. It was cool to see them grow into a real competitor for the big distributors.

62 points by upofadown 7mo ago

It's hard to overstate how screwed hardware design and prototyping would be if companies like digi-key went under. There's only a few electronics distributors like them around and most of them are centered in the US.

0_____0 7mo ago
If we lost Digikey, Mouser, and AVNET, it would be catastrophic. Entire US engineering divisions would leave for Shenzhen.
- nine-one-two 7mo ago
  What about farnell and arrow?
  - joezydeco 7mo ago
    Be careful with Arrow. They like to ask what you're working on and if they discover an opportunity to bid on the same work they'll undercut you.
    - elevation 7mo ago
      How would Arrow undercut you? An R&D firm I know is constantly spinning low volume prototype designs with wildly different BOMs; they treat Arrow reps like North Korean spies. But another crank-turning design firm I know trusts Arrow to do BOM reviews because of how many times they’ve come through with a reel of hard-to-find parts, making a design manufacturable in a pinch, unlocking sales. The exact same Arrow rep serves both firms, I’ve never figured out why he is treated so differently.
      - joezydeco 7mo ago
        I was in the first type of firm. We were working on an IoT edge device for a large restaurant chain as a subcontractor to an equipment company. Arrow figured out what the project was and who the end customer was and approached them directly with a presentation on their in-house design services and fabrication. Skipping the OEM allowed them to undercut us on price and schedule.

markus_zhang 7mo ago

Does North America have some supply of those electronics components, or are we totally depending on Asian producers? I assume if prices hike up it will improve local production — or it was suggested since the introduction of more tariffs.

sethops1 7mo ago

When I order from Mouser (a Digi-key competitor based in Dallas) they plainly charge a 10-15% tariff fee. I'm struggling to understand why this solution isn't obvious. You have to pass the cost onto the consumer, or your margins dwindle. It's trivial math. > People are also having to intervene in once-automated tasks. Thousands of orders that used to auto-flow directly to the warehouse floor for same-day shipping now often miscalculate tariff costs. Charge a blanket tariff fee like Mouser.

markus_zhang 7mo ago
Yeah that’s what I thought too. I think people are find with some 50-100% hike of prices on ham radios, oscilloscopes, and even phones, if local production starts to appear.
- analognoise 7mo ago
  What lol no they’re not. None of those benefits of a price hike go to American workers. They get low wage factory jobs, not old school pension jobs, and all their stuff goes up in price? Laughable. I doubt Americans won’t even pay 5% more to get stuff made in the USA.
  - markus_zhang 7mo ago
    Ah OK, so when do we see production coming back to North America? On the other hand, didn't TMSC and other manufacturers plan to open a few spots in the US?
    - mindslight 7mo ago
      Perhaps after the incompetent performative fascists are evicted, all of the structure fires they wantonly started have been put out, and there is some halfway-competent administration that appreciates the scale of the problem we are dealing with. Tariffs would have helped 20 years ago, but here they're basically just a wistful dementia echo of something that could have been. Applying a policy that's decades out of date merely further strangles American industry. This article is a great example if you actually examine the details of the situation - Digikey is an input to the types of domestic manufacturing that actually employs labor, yet blanket tariffs simply make them even less competitive.

AlotOfReading 7mo ago

I've only seen a small portion of the chaos from my side of the market, but that's been chaotic enough. All of this chaos has actually slowed down our US manufacturing buildout. We'd like to build US factories, but we're having to slow them because of the uncertainty. A foreign factory only has the uncertainty on the US import/export, while a US factory has uncertainty on all imports/exports.

hedora 7mo ago
Anecdotes are not data, so here's some data: https://fred.stlouisfed.org/series/C307RC1Q027SBEA https://fred.stlouisfed.org/series/C307RC1Q027SBEA US Factory build out investment increased from $80B/year to $240B/year under Biden. Trump's economic policy has managed to undo $30B of that so far, and the trend is accelerating.
- HPMOR 7mo ago
  Anecdotes __are__ data. How much weight you ascribe to it as being representative is different. But you cannot disqualify it as 'not data'. It is usually a leading indicator of what could potentially show up in these more robust datasets.
- PearlRiver 7mo ago
  Meanwhile China has a 1200 billion trade surplus. They are flooding the world with cheap Chinese shit despite the bloviating orange.
  - hedora 7mo ago
    In other news, we’re still trying to backfill a reason for the Iran War. One theory is that we’ll starve China for oil, so their navy won’t be able to hold Taiwan. (Projections show the US losing a war like that badly due to them have orders of magnitude more naval yards than us.) Anyway, while enumerating all the ways in which that is a dumb plan, it occurred to me that the intentional slowdown in EV and solar uptake in the US is turning a manufacturing gap into an actual present day strategic gap. China imports a lot of oil, but, as a percentage of their economy, they are way less dependent on fossil fuels than us, and tariffs on solar/batteries are basically equivalent to us shipping them free energy production and distribution infrastructure.

throwup238 7mo ago

Should note that this article is from April 2025. Digikey sruvives and the tariffs are supposed to be refunded.

Xylakant 7mo ago
Even if tariffs are refunded at some point, the cost of implementing and managing the tariffs, list sales, lost opportunities and so on are not. Nor is the cost of recovering the tariffs from the government.
- downrightmike 7mo ago
  Credit card and banks should be able to manage the transactions, they keep records for years. If they were smart, they'd be pushing to get the deal and a massive fee
  - Xylakant 7mo ago
    Neither bank nor credit card companies can possibly manage the tariff question for any party. Tariffs get charged on the goods that you import and depend on what specifically you import. Banks manage the financial transaction, but have no specific knowledge what goods you're paying for and at what rate they are subject to tariffs or taxes.
kennywinker 7mo ago
The supreme court overturned the emergency act tariffs, but trump immediately used another statute to re-instate tariffs (effective for six months, anyway). For china, the supreme court ruling was effectively a 5% reduction in tariffs. The situation remains dumb. https://www.china-briefing.com/news/us-china-tariff-rates-2025/ https://www.china-briefing.com/news/us-china-tariff-rates-20... (Url says 2025 but has been updated continuously)

RRWagner 7mo ago

It seems that no one ever mentions that every dollar given up to tariffs is that much less for growing staff, equipment, facility and R&D expansion. It's literally a drag on the entire GDP and ecomomic growth. More subtle is that every dollar saved in buying components from China is more money for all of the forementioned.

longislandguido 7mo ago
Lol DigiKey has been itemizing tariffs for years. They're not "giving up" any money; it's literally an extra line item on your invoice. For the same reason when small local businesses charge you a 3% service fee to use credit; they're not giving up that money because you wouldn't have been charged it otherwise.
- AlotOfReading 7mo ago
  If you read the article, you'll see the paragraphs about all the paperwork to set up a FTZ, the delays in fixing broken/changing tariff calculations, and the fact that some of the other parties involved simply aren't paying their share of the costs. All of those affect digikey's costs. The parent's point also applies to the companies buying product. Every dollar they spend on tariff line items is another dollar they're not sending back into the economy via expansion and wages.

deleted 7mo ago

[deleted]

takahitoyoneda 7mo ago

[flagged]

nine-one-two 7mo ago

Anyone who works in the semi industry has been hearing management try to be politically correct when trying to explain how badly tariffs are screwing everyone over every quarter. Tying themselves in knots to avoid saying how idiotic the trump administration is. And here we are trying to wait him out until the us gets a president with a brain. Good luck I hope all can outlast this.

grim_io 7mo ago

If only the people responsible for the tariffs, who miss no chance to (miss)quote Reagan, would take the time to listen to his actual words regarding tariffs https://www.youtube.com/watch?v=5t5QK03KXPc https://www.youtube.com/watch?v=5t5QK03KXPc

pjdesno 7mo ago

I remember ordering parts from Digi-Key in 1980 or so when I was in high school. The catalog was less than 1/4 inch thick, and listed various surplus things on the back. It was cool to see them grow into a real competitor for the big distributors.