Analyst Warns Tariffs Could Push US Bitcoin Mining Build Costs 20% Higher

Needham analyst John Todaro warns that materials costs for high-performance computing (HPC) capital expenditures and core infrastructure at U.S. Bitcoin mining sites are set to rise by roughly 20%, driven largely by newly imposed tariffs.

Most Bitcoin mining machine manufacturers rely heavily on Asia for production.

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Given the soft demand for mining rigs today, manufacturers likely eat some tariffs but already operate on thin margins.

According to Todaro, Bitdeer sells machines at $15/th. He estimated that it produces around $11/th.

Recently, the company cited soft demand from private miners as they delayed delivery to customers on most prior orders (the company can retain the 20% deposit, however).

Here are Todaro’s estimates for tariff impacts across his complete coverage universe:

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For Applied Digital Corp APLD, Todaro noted the majority of the first 100MW HPC build was done at ~$11 million/MW. The analyst expects ~20% higher capex from here for the remainder and new builds ($13 million/MW). He expects similar increases to HPC build costs for Cipher Mining Inc CIFR, Riot Platforms, Inc RIOT, IREN Ltd IREN, TeraWulf Inc WULF, Hut 8 Corp HUT, Bitdeer Technologies Group BTDR.

Todaro expects the retrofit of Core Scientific, Inc’s CORZ sites, which were initially expected to cost $5 million – 8 million, to be at the high end or above that range. Core Scientific’s spending is fixed at $1.5 million/MW for its HPC site builds. Todaro expects builds to run similarly to peers’ 20% higher costs for future sites with a different tenant.

Bitdeer Technologies produces its own mining machines manufactured in Malaysia, primarily (24% tariff). Todaro confirmed the company expects ~20% higher build costs for its U.S. data centers and mining site infrastructure (not including machines). Machine manufacturing costs see some relief with semiconductors. The analyst also estimates that most of its prior external sales are to private miners outside the U.S.

Todaro noted Hut 8 as a large purchaser of Bitmain machines (Asia production). Recent orders hold the company over for near-term targets, but hash expansion is subject to higher machine prices. Notably, Hut 8’s Bitcoin mining infrastructure is now part of American Bitcoin, of which Eric Trump is a co-founder and CSO.

Robinhood Markets, Inc HOOD has no direct exposure to tariffs besides its Gold card offering, which is manufactured by CompoSecure, Inc CMPO. Todaro expects CompoSecure to see higher material costs for its metal cards.

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