• In a world where graphics cards have become the new gold standard for currency, it seems we’ve all unknowingly signed up for a masterclass in price inflation. The latest statistics on the tragic rise of graphics card prices reveal that our wallets are now lighter than our gaming rigs. Who knew that “official price” was just a suggestion?

    As we bravely navigate this digital minefield, one can only wonder if these price hikes come with a free side of disappointment. Should we start a support group for those suffering from post-purchase regret? After all, the only thing more inflated than these prices is our hopes for a reasonable gaming experience.

    #GraphicsCardCrisis #PriceInflation #GamingCommunity #TechWoes #Econ101
    In a world where graphics cards have become the new gold standard for currency, it seems we’ve all unknowingly signed up for a masterclass in price inflation. The latest statistics on the tragic rise of graphics card prices reveal that our wallets are now lighter than our gaming rigs. Who knew that “official price” was just a suggestion? As we bravely navigate this digital minefield, one can only wonder if these price hikes come with a free side of disappointment. Should we start a support group for those suffering from post-purchase regret? After all, the only thing more inflated than these prices is our hopes for a reasonable gaming experience. #GraphicsCardCrisis #PriceInflation #GamingCommunity #TechWoes #Econ101
    ARABHARDWARE.NET
    إحصائيات مؤسفة عن أزمة ارتفاع أسعار كروت الشاشة عن السعر الرسمي!
    The post إحصائيات مؤسفة عن أزمة ارتفاع أسعار كروت الشاشة عن السعر الرسمي! appeared first on عرب هاردوير.
    Like
    Wow
    Love
    Sad
    Angry
    36
    1 Comments 0 Shares 0 Reviews
  • The hidden time bomb in the tax code that's fueling mass tech layoffs: A decades-old tax rule helped build America's tech economy. A quiet change under Trump helped dismantle it

    For the past two years, it’s been a ghost in the machine of American tech. Between 2022 and today, a little-noticed tweak to the U.S. tax code has quietly rewired the financial logic of how American companies invest in research and development. Outside of CFO and accounting circles, almost no one knew it existed. “I work on these tax write-offs and still hadn’t heard about this,” a chief operating officer at a private-equity-backed tech company told Quartz. “It’s just been so weirdly silent.”AdvertisementStill, the delayed change to a decades-old tax provision — buried deep in the 2017 tax law — has contributed to the loss of hundreds of thousands of high-paying, white-collar jobs. That’s the picture that emerges from a review of corporate filings, public financial data, analysis of timelines, and interviews with industry insiders. One accountant, working in-house at a tech company, described it as a “niche issue with broad impact,” echoing sentiments from venture capital investors also interviewed for this article. Some spoke on condition of anonymity to discuss sensitive political matters.Since the start of 2023, more than half-a-million tech workers have been laid off, according to industry tallies. Headlines have blamed over-hiring during the pandemic and, more recently, AI. But beneath the surface was a hidden accelerant: a change to what’s known as Section 174 that helped gut in-house software and product development teams everywhere from tech giants such as Microsoftand Metato much smaller, private, direct-to-consumer and other internet-first companies.Now, as a bipartisan effort to repeal the Section 174 change moves through Congress, bigger questions are surfacing: How did a single line in the tax code help trigger a tsunami of mass layoffs? And why did no one see it coming? For almost 70 years, American companies could deduct 100% of qualified research and development spending in the year they incurred the costs. Salaries, software, contractor payments — if it contributed to creating or improving a product, it came off the top of a firm’s taxable income.AdvertisementThe deduction was guaranteed by Section 174 of the IRS Code of 1954, and under the provision, R&D flourished in the U.S.Microsoft was founded in 1975. Applelaunched its first computer in 1976. Googleincorporated in 1998. Facebook opened to the general public in 2006. All these companies, now among the most valuable in the world, developed their earliest products — programming tools, hardware, search engines — under a tax system that rewarded building now, not later.The subsequent rise of smartphones, cloud computing, and mobile apps also happened in an America where companies could immediately write off their investments in engineering, infrastructure, and experimentation. It was a baseline assumption — innovation and risk-taking subsidized by the tax code — that shaped how founders operated and how investors made decisions.In turn, tech companies largely built their products in the U.S. AdvertisementMicrosoft’s operating systems were coded in Washington state. Apple’s early hardware and software teams were in California. Google’s search engine was born at Stanford and scaled from Mountain View. Facebook’s entire social architecture was developed in Menlo Park. The deduction directly incentivized keeping R&D close to home, rewarding companies for investing in American workers, engineers, and infrastructure.That’s what makes the politics of Section 174 so revealing. For all the rhetoric about bringing jobs back and making things in America, the first Trump administration’s major tax bill arguably helped accomplish the opposite.When Congress passed the Tax Cuts and Jobs Act, the signature legislative achievement of President Donald Trump’s first term, it slashed the corporate tax rate from 35% to 21% — a massive revenue loss on paper for the federal government.To make the 2017 bill comply with Senate budget rules, lawmakers needed to offset the cost. So they added future tax hikes that wouldn’t kick in right away, wouldn’t provoke immediate backlash from businesses, and could, in theory, be quietly repealed later.AdvertisementThe delayed change to Section 174 — from immediate expensing of R&D to mandatory amortization, meaning that companies must spread the deduction out in smaller chunks over five or even 15-year periods — was that kind of provision. It didn’t start affecting the budget until 2022, but it helped the TCJA appear “deficit neutral” over the 10-year window used for legislative scoring.The delay wasn’t a technical necessity. It was a political tactic. Such moves are common in tax legislation. Phase-ins and delayed provisions let lawmakers game how the Congressional Budget Office— Congress’ nonpartisan analyst of how bills impact budgets and deficits — scores legislation, pushing costs or revenue losses outside official forecasting windows.And so, on schedule in 2022, the change to Section 174 went into effect. Companies filed their 2022 tax returns under the new rules in early 2023. And suddenly, R&D wasn’t a full, immediate write-off anymore. The tax benefits of salaries for engineers, product and project managers, data scientists, and even some user experience and marketing staff — all of which had previously reduced taxable income in year one — now had to be spread out over five- or 15-year periods. To understand the impact, imagine a personal tax code change that allowed you to deduct 100% of your biggest source of expenses, and that becoming a 20% deduction. For cash-strapped companies, especially those not yet profitable, the result was a painful tax bill just as venture funding dried up and interest rates soared.AdvertisementSalesforce office buildings in San Francisco.Photo: Jason Henry/BloombergIt’s no coincidence that Meta announced its “Year of Efficiency” immediately after the Section 174 change took effect. Ditto Microsoft laying off 10,000 employees in January 2023 despite strong earnings, or Google parent Alphabet cutting 12,000 jobs around the same time.Amazonalso laid off almost 30,000 people, with cuts focused not just on logistics but on Alexa and internal cloud tools — precisely the kinds of projects that would have once qualified as immediately deductible R&D. Salesforceeliminated 10% of its staff, or 8,000 people, including entire product teams.In public, companies blamed bloat and AI. But inside boardrooms, spreadsheets were telling a quieter story. And MD&A notes — management’s notes on the numbers — buried deep in 10-K filings recorded the change, too. R&D had become more expensive to carry. Headcount, the leading R&D expense across the tech industry, was the easiest thing to cut.AdvertisementIn its 2023 annual report, Meta described salaries as its single biggest R&D expense. Between the first and second years that the Section 174 change began affecting tax returns, Meta cut its total workforce by almost 25%. Over the same period, Microsoft reduced its global headcount by about 7%, with cuts concentrated in product-facing, engineering-heavy roles.Smaller companies without the fortress-like balance sheets of Big Tech have arguably been hit even harder. Twilioslashed 22% of its workforce in 2023 alone. Shopifycut almost 30% of staff in 2022 and 2023. Coinbasereduced headcount by 36% across a pair of brutal restructuring waves.Since going into effect, the provision has hit at the very heart of America’s economic growth engine: the tech sector.By market cap, tech giants dominate the S&P 500, with the “Magnificent 7” alone accounting for more than a third of the index’s total value. Workforce numbers tell a similar story, with tech employing millions of Americans directly and supporting the employment of tens of millions more. As measured by GDP, capital-T tech contributes about 10% of national output.AdvertisementIt’s not just that tech layoffs were large, it’s that they were massively disproportionate. Across the broader U.S. economy, job cuts hovered around in low single digits across most sectors. But in tech, entire divisions vanished, with a whopping 60% jump in layoffs between 2022 and 2023. Some cuts reflected real inefficiencies — a response to over-hiring during the zero-interest rate boom. At the same time, many of the roles eliminated were in R&D, product, and engineering, precisely the kind of functions that had once benefitted from generous tax treatment under Section 174.Throughout the 2010s, a broad swath of startups, direct-to-consumer brands, and internet-first firms — basically every company you recognize from Instagram or Facebook ads — built their growth models around a kind of engineered break-even.The tax code allowed them to spend aggressively on product and engineering, then write it all off as R&D, keeping their taxable income close to zero by design. It worked because taxable income and actual cash flow were often notGAAP accounting practices. Basically, as long as spending counted as R&D, companies could report losses to investors while owing almost nothing to the IRS.But the Section 174 change broke that model. Once those same expenses had to be spread out, or amortized, over multiple years, the tax shield vanished. Companies that were still burning cash suddenly looked profitable on paper, triggering real tax bills on imaginary gains.AdvertisementThe logic that once fueled a generation of digital-first growth collapsed overnight.So it wasn’t just tech experiencing effects. From 1954 until 2022, the U.S. tax code had encouraged businesses of all stripes to behave like tech companies. From retail to logistics, healthcare to media, if firms built internal tools, customized a software stack, or invested in business intelligence and data-driven product development, they could expense those costs. The write-off incentivized in-house builds and fast growth well outside the capital-T tech sector. This lines up with OECD research showing that immediate deductions foster innovation more than spread-out ones.And American companies ran with that logic. According to government data, U.S. businesses reported about billion in R&D expenditures in 2019 alone, and almost half of that came from industries outside traditional tech. The Bureau of Economic Analysis estimates that this sector, the broader digital economy, accounts for another 10% of GDP.Add that to core tech’s contribution, and the Section 174 shift has likely touched at least 20% of the U.S. economy.AdvertisementThe result? A tax policy aimed at raising short-term revenue effectively hid a time bomb inside the growth engines of thousands of companies. And when it detonated, it kneecapped the incentive for hiring American engineers or investing in American-made tech and digital products.It made building tech companies in America look irrational on a spreadsheet.A bipartisan group of lawmakers is pushing to repeal the Section 174 change, with business groups, CFOs, crypto executives, and venture capitalists lobbying hard for retroactive relief. But the politics are messy. Fixing 174 would mean handing a tax break to the same companies many voters in both parties see as symbols of corporate excess. Any repeal would also come too late for the hundreds of thousands of workers already laid off.And of course, the losses don’t stop at Meta’s or Google’s campus gates. They ripple out. When high-paid tech workers disappear, so do the lunch orders. The house tours. The contract gigs. The spending habits that sustain entire urban economies and thousands of other jobs. Sandwich artists. Rideshare drivers. Realtors. Personal trainers. House cleaners. In tech-heavy cities, the fallout runs deep — and it’s still unfolding.AdvertisementWashington is now poised to pass a second Trump tax bill — one packed with more obscure provisions, more delayed impacts, more quiet redistribution. And it comes as analysts are only just beginning to understand the real-world effects of the last round.The Section 174 change “significantly increased the tax burden on companies investing in innovation, potentially stifling economic growth and reducing the United States’ competitiveness on the global stage,” according to the tax consulting firm KBKG. Whether the U.S. will reverse course — or simply adapt to a new normal — remains to be seen.
    #hidden #time #bomb #tax #code
    The hidden time bomb in the tax code that's fueling mass tech layoffs: A decades-old tax rule helped build America's tech economy. A quiet change under Trump helped dismantle it
    For the past two years, it’s been a ghost in the machine of American tech. Between 2022 and today, a little-noticed tweak to the U.S. tax code has quietly rewired the financial logic of how American companies invest in research and development. Outside of CFO and accounting circles, almost no one knew it existed. “I work on these tax write-offs and still hadn’t heard about this,” a chief operating officer at a private-equity-backed tech company told Quartz. “It’s just been so weirdly silent.”AdvertisementStill, the delayed change to a decades-old tax provision — buried deep in the 2017 tax law — has contributed to the loss of hundreds of thousands of high-paying, white-collar jobs. That’s the picture that emerges from a review of corporate filings, public financial data, analysis of timelines, and interviews with industry insiders. One accountant, working in-house at a tech company, described it as a “niche issue with broad impact,” echoing sentiments from venture capital investors also interviewed for this article. Some spoke on condition of anonymity to discuss sensitive political matters.Since the start of 2023, more than half-a-million tech workers have been laid off, according to industry tallies. Headlines have blamed over-hiring during the pandemic and, more recently, AI. But beneath the surface was a hidden accelerant: a change to what’s known as Section 174 that helped gut in-house software and product development teams everywhere from tech giants such as Microsoftand Metato much smaller, private, direct-to-consumer and other internet-first companies.Now, as a bipartisan effort to repeal the Section 174 change moves through Congress, bigger questions are surfacing: How did a single line in the tax code help trigger a tsunami of mass layoffs? And why did no one see it coming? For almost 70 years, American companies could deduct 100% of qualified research and development spending in the year they incurred the costs. Salaries, software, contractor payments — if it contributed to creating or improving a product, it came off the top of a firm’s taxable income.AdvertisementThe deduction was guaranteed by Section 174 of the IRS Code of 1954, and under the provision, R&D flourished in the U.S.Microsoft was founded in 1975. Applelaunched its first computer in 1976. Googleincorporated in 1998. Facebook opened to the general public in 2006. All these companies, now among the most valuable in the world, developed their earliest products — programming tools, hardware, search engines — under a tax system that rewarded building now, not later.The subsequent rise of smartphones, cloud computing, and mobile apps also happened in an America where companies could immediately write off their investments in engineering, infrastructure, and experimentation. It was a baseline assumption — innovation and risk-taking subsidized by the tax code — that shaped how founders operated and how investors made decisions.In turn, tech companies largely built their products in the U.S. AdvertisementMicrosoft’s operating systems were coded in Washington state. Apple’s early hardware and software teams were in California. Google’s search engine was born at Stanford and scaled from Mountain View. Facebook’s entire social architecture was developed in Menlo Park. The deduction directly incentivized keeping R&D close to home, rewarding companies for investing in American workers, engineers, and infrastructure.That’s what makes the politics of Section 174 so revealing. For all the rhetoric about bringing jobs back and making things in America, the first Trump administration’s major tax bill arguably helped accomplish the opposite.When Congress passed the Tax Cuts and Jobs Act, the signature legislative achievement of President Donald Trump’s first term, it slashed the corporate tax rate from 35% to 21% — a massive revenue loss on paper for the federal government.To make the 2017 bill comply with Senate budget rules, lawmakers needed to offset the cost. So they added future tax hikes that wouldn’t kick in right away, wouldn’t provoke immediate backlash from businesses, and could, in theory, be quietly repealed later.AdvertisementThe delayed change to Section 174 — from immediate expensing of R&D to mandatory amortization, meaning that companies must spread the deduction out in smaller chunks over five or even 15-year periods — was that kind of provision. It didn’t start affecting the budget until 2022, but it helped the TCJA appear “deficit neutral” over the 10-year window used for legislative scoring.The delay wasn’t a technical necessity. It was a political tactic. Such moves are common in tax legislation. Phase-ins and delayed provisions let lawmakers game how the Congressional Budget Office— Congress’ nonpartisan analyst of how bills impact budgets and deficits — scores legislation, pushing costs or revenue losses outside official forecasting windows.And so, on schedule in 2022, the change to Section 174 went into effect. Companies filed their 2022 tax returns under the new rules in early 2023. And suddenly, R&D wasn’t a full, immediate write-off anymore. The tax benefits of salaries for engineers, product and project managers, data scientists, and even some user experience and marketing staff — all of which had previously reduced taxable income in year one — now had to be spread out over five- or 15-year periods. To understand the impact, imagine a personal tax code change that allowed you to deduct 100% of your biggest source of expenses, and that becoming a 20% deduction. For cash-strapped companies, especially those not yet profitable, the result was a painful tax bill just as venture funding dried up and interest rates soared.AdvertisementSalesforce office buildings in San Francisco.Photo: Jason Henry/BloombergIt’s no coincidence that Meta announced its “Year of Efficiency” immediately after the Section 174 change took effect. Ditto Microsoft laying off 10,000 employees in January 2023 despite strong earnings, or Google parent Alphabet cutting 12,000 jobs around the same time.Amazonalso laid off almost 30,000 people, with cuts focused not just on logistics but on Alexa and internal cloud tools — precisely the kinds of projects that would have once qualified as immediately deductible R&D. Salesforceeliminated 10% of its staff, or 8,000 people, including entire product teams.In public, companies blamed bloat and AI. But inside boardrooms, spreadsheets were telling a quieter story. And MD&A notes — management’s notes on the numbers — buried deep in 10-K filings recorded the change, too. R&D had become more expensive to carry. Headcount, the leading R&D expense across the tech industry, was the easiest thing to cut.AdvertisementIn its 2023 annual report, Meta described salaries as its single biggest R&D expense. Between the first and second years that the Section 174 change began affecting tax returns, Meta cut its total workforce by almost 25%. Over the same period, Microsoft reduced its global headcount by about 7%, with cuts concentrated in product-facing, engineering-heavy roles.Smaller companies without the fortress-like balance sheets of Big Tech have arguably been hit even harder. Twilioslashed 22% of its workforce in 2023 alone. Shopifycut almost 30% of staff in 2022 and 2023. Coinbasereduced headcount by 36% across a pair of brutal restructuring waves.Since going into effect, the provision has hit at the very heart of America’s economic growth engine: the tech sector.By market cap, tech giants dominate the S&P 500, with the “Magnificent 7” alone accounting for more than a third of the index’s total value. Workforce numbers tell a similar story, with tech employing millions of Americans directly and supporting the employment of tens of millions more. As measured by GDP, capital-T tech contributes about 10% of national output.AdvertisementIt’s not just that tech layoffs were large, it’s that they were massively disproportionate. Across the broader U.S. economy, job cuts hovered around in low single digits across most sectors. But in tech, entire divisions vanished, with a whopping 60% jump in layoffs between 2022 and 2023. Some cuts reflected real inefficiencies — a response to over-hiring during the zero-interest rate boom. At the same time, many of the roles eliminated were in R&D, product, and engineering, precisely the kind of functions that had once benefitted from generous tax treatment under Section 174.Throughout the 2010s, a broad swath of startups, direct-to-consumer brands, and internet-first firms — basically every company you recognize from Instagram or Facebook ads — built their growth models around a kind of engineered break-even.The tax code allowed them to spend aggressively on product and engineering, then write it all off as R&D, keeping their taxable income close to zero by design. It worked because taxable income and actual cash flow were often notGAAP accounting practices. Basically, as long as spending counted as R&D, companies could report losses to investors while owing almost nothing to the IRS.But the Section 174 change broke that model. Once those same expenses had to be spread out, or amortized, over multiple years, the tax shield vanished. Companies that were still burning cash suddenly looked profitable on paper, triggering real tax bills on imaginary gains.AdvertisementThe logic that once fueled a generation of digital-first growth collapsed overnight.So it wasn’t just tech experiencing effects. From 1954 until 2022, the U.S. tax code had encouraged businesses of all stripes to behave like tech companies. From retail to logistics, healthcare to media, if firms built internal tools, customized a software stack, or invested in business intelligence and data-driven product development, they could expense those costs. The write-off incentivized in-house builds and fast growth well outside the capital-T tech sector. This lines up with OECD research showing that immediate deductions foster innovation more than spread-out ones.And American companies ran with that logic. According to government data, U.S. businesses reported about billion in R&D expenditures in 2019 alone, and almost half of that came from industries outside traditional tech. The Bureau of Economic Analysis estimates that this sector, the broader digital economy, accounts for another 10% of GDP.Add that to core tech’s contribution, and the Section 174 shift has likely touched at least 20% of the U.S. economy.AdvertisementThe result? A tax policy aimed at raising short-term revenue effectively hid a time bomb inside the growth engines of thousands of companies. And when it detonated, it kneecapped the incentive for hiring American engineers or investing in American-made tech and digital products.It made building tech companies in America look irrational on a spreadsheet.A bipartisan group of lawmakers is pushing to repeal the Section 174 change, with business groups, CFOs, crypto executives, and venture capitalists lobbying hard for retroactive relief. But the politics are messy. Fixing 174 would mean handing a tax break to the same companies many voters in both parties see as symbols of corporate excess. Any repeal would also come too late for the hundreds of thousands of workers already laid off.And of course, the losses don’t stop at Meta’s or Google’s campus gates. They ripple out. When high-paid tech workers disappear, so do the lunch orders. The house tours. The contract gigs. The spending habits that sustain entire urban economies and thousands of other jobs. Sandwich artists. Rideshare drivers. Realtors. Personal trainers. House cleaners. In tech-heavy cities, the fallout runs deep — and it’s still unfolding.AdvertisementWashington is now poised to pass a second Trump tax bill — one packed with more obscure provisions, more delayed impacts, more quiet redistribution. And it comes as analysts are only just beginning to understand the real-world effects of the last round.The Section 174 change “significantly increased the tax burden on companies investing in innovation, potentially stifling economic growth and reducing the United States’ competitiveness on the global stage,” according to the tax consulting firm KBKG. Whether the U.S. will reverse course — or simply adapt to a new normal — remains to be seen. #hidden #time #bomb #tax #code
    QZ.COM
    The hidden time bomb in the tax code that's fueling mass tech layoffs: A decades-old tax rule helped build America's tech economy. A quiet change under Trump helped dismantle it
    For the past two years, it’s been a ghost in the machine of American tech. Between 2022 and today, a little-noticed tweak to the U.S. tax code has quietly rewired the financial logic of how American companies invest in research and development. Outside of CFO and accounting circles, almost no one knew it existed. “I work on these tax write-offs and still hadn’t heard about this,” a chief operating officer at a private-equity-backed tech company told Quartz. “It’s just been so weirdly silent.”AdvertisementStill, the delayed change to a decades-old tax provision — buried deep in the 2017 tax law — has contributed to the loss of hundreds of thousands of high-paying, white-collar jobs. That’s the picture that emerges from a review of corporate filings, public financial data, analysis of timelines, and interviews with industry insiders. One accountant, working in-house at a tech company, described it as a “niche issue with broad impact,” echoing sentiments from venture capital investors also interviewed for this article. Some spoke on condition of anonymity to discuss sensitive political matters.Since the start of 2023, more than half-a-million tech workers have been laid off, according to industry tallies. Headlines have blamed over-hiring during the pandemic and, more recently, AI. But beneath the surface was a hidden accelerant: a change to what’s known as Section 174 that helped gut in-house software and product development teams everywhere from tech giants such as Microsoft (MSFT) and Meta (META) to much smaller, private, direct-to-consumer and other internet-first companies.Now, as a bipartisan effort to repeal the Section 174 change moves through Congress, bigger questions are surfacing: How did a single line in the tax code help trigger a tsunami of mass layoffs? And why did no one see it coming? For almost 70 years, American companies could deduct 100% of qualified research and development spending in the year they incurred the costs. Salaries, software, contractor payments — if it contributed to creating or improving a product, it came off the top of a firm’s taxable income.AdvertisementThe deduction was guaranteed by Section 174 of the IRS Code of 1954, and under the provision, R&D flourished in the U.S.Microsoft was founded in 1975. Apple (AAPL) launched its first computer in 1976. Google (GOOGL) incorporated in 1998. Facebook opened to the general public in 2006. All these companies, now among the most valuable in the world, developed their earliest products — programming tools, hardware, search engines — under a tax system that rewarded building now, not later.The subsequent rise of smartphones, cloud computing, and mobile apps also happened in an America where companies could immediately write off their investments in engineering, infrastructure, and experimentation. It was a baseline assumption — innovation and risk-taking subsidized by the tax code — that shaped how founders operated and how investors made decisions.In turn, tech companies largely built their products in the U.S. AdvertisementMicrosoft’s operating systems were coded in Washington state. Apple’s early hardware and software teams were in California. Google’s search engine was born at Stanford and scaled from Mountain View. Facebook’s entire social architecture was developed in Menlo Park. The deduction directly incentivized keeping R&D close to home, rewarding companies for investing in American workers, engineers, and infrastructure.That’s what makes the politics of Section 174 so revealing. For all the rhetoric about bringing jobs back and making things in America, the first Trump administration’s major tax bill arguably helped accomplish the opposite.When Congress passed the Tax Cuts and Jobs Act (TCJA), the signature legislative achievement of President Donald Trump’s first term, it slashed the corporate tax rate from 35% to 21% — a massive revenue loss on paper for the federal government.To make the 2017 bill comply with Senate budget rules, lawmakers needed to offset the cost. So they added future tax hikes that wouldn’t kick in right away, wouldn’t provoke immediate backlash from businesses, and could, in theory, be quietly repealed later.AdvertisementThe delayed change to Section 174 — from immediate expensing of R&D to mandatory amortization, meaning that companies must spread the deduction out in smaller chunks over five or even 15-year periods — was that kind of provision. It didn’t start affecting the budget until 2022, but it helped the TCJA appear “deficit neutral” over the 10-year window used for legislative scoring.The delay wasn’t a technical necessity. It was a political tactic. Such moves are common in tax legislation. Phase-ins and delayed provisions let lawmakers game how the Congressional Budget Office (CBO) — Congress’ nonpartisan analyst of how bills impact budgets and deficits — scores legislation, pushing costs or revenue losses outside official forecasting windows.And so, on schedule in 2022, the change to Section 174 went into effect. Companies filed their 2022 tax returns under the new rules in early 2023. And suddenly, R&D wasn’t a full, immediate write-off anymore. The tax benefits of salaries for engineers, product and project managers, data scientists, and even some user experience and marketing staff — all of which had previously reduced taxable income in year one — now had to be spread out over five- or 15-year periods. To understand the impact, imagine a personal tax code change that allowed you to deduct 100% of your biggest source of expenses, and that becoming a 20% deduction. For cash-strapped companies, especially those not yet profitable, the result was a painful tax bill just as venture funding dried up and interest rates soared.AdvertisementSalesforce office buildings in San Francisco.Photo: Jason Henry/Bloomberg (Getty Images)It’s no coincidence that Meta announced its “Year of Efficiency” immediately after the Section 174 change took effect. Ditto Microsoft laying off 10,000 employees in January 2023 despite strong earnings, or Google parent Alphabet cutting 12,000 jobs around the same time.Amazon (AMZN) also laid off almost 30,000 people, with cuts focused not just on logistics but on Alexa and internal cloud tools — precisely the kinds of projects that would have once qualified as immediately deductible R&D. Salesforce (CRM) eliminated 10% of its staff, or 8,000 people, including entire product teams.In public, companies blamed bloat and AI. But inside boardrooms, spreadsheets were telling a quieter story. And MD&A notes — management’s notes on the numbers — buried deep in 10-K filings recorded the change, too. R&D had become more expensive to carry. Headcount, the leading R&D expense across the tech industry, was the easiest thing to cut.AdvertisementIn its 2023 annual report, Meta described salaries as its single biggest R&D expense. Between the first and second years that the Section 174 change began affecting tax returns, Meta cut its total workforce by almost 25%. Over the same period, Microsoft reduced its global headcount by about 7%, with cuts concentrated in product-facing, engineering-heavy roles.Smaller companies without the fortress-like balance sheets of Big Tech have arguably been hit even harder. Twilio (TWLO) slashed 22% of its workforce in 2023 alone. Shopify (SHOP) (headquartered in Canada but with much of its R&D teams in the U.S.) cut almost 30% of staff in 2022 and 2023. Coinbase (COIN) reduced headcount by 36% across a pair of brutal restructuring waves.Since going into effect, the provision has hit at the very heart of America’s economic growth engine: the tech sector.By market cap, tech giants dominate the S&P 500, with the “Magnificent 7” alone accounting for more than a third of the index’s total value. Workforce numbers tell a similar story, with tech employing millions of Americans directly and supporting the employment of tens of millions more. As measured by GDP, capital-T tech contributes about 10% of national output.AdvertisementIt’s not just that tech layoffs were large, it’s that they were massively disproportionate. Across the broader U.S. economy, job cuts hovered around in low single digits across most sectors. But in tech, entire divisions vanished, with a whopping 60% jump in layoffs between 2022 and 2023. Some cuts reflected real inefficiencies — a response to over-hiring during the zero-interest rate boom. At the same time, many of the roles eliminated were in R&D, product, and engineering, precisely the kind of functions that had once benefitted from generous tax treatment under Section 174.Throughout the 2010s, a broad swath of startups, direct-to-consumer brands, and internet-first firms — basically every company you recognize from Instagram or Facebook ads — built their growth models around a kind of engineered break-even.The tax code allowed them to spend aggressively on product and engineering, then write it all off as R&D, keeping their taxable income close to zero by design. It worked because taxable income and actual cash flow were often notGAAP accounting practices. Basically, as long as spending counted as R&D, companies could report losses to investors while owing almost nothing to the IRS.But the Section 174 change broke that model. Once those same expenses had to be spread out, or amortized, over multiple years, the tax shield vanished. Companies that were still burning cash suddenly looked profitable on paper, triggering real tax bills on imaginary gains.AdvertisementThe logic that once fueled a generation of digital-first growth collapsed overnight.So it wasn’t just tech experiencing effects. From 1954 until 2022, the U.S. tax code had encouraged businesses of all stripes to behave like tech companies. From retail to logistics, healthcare to media, if firms built internal tools, customized a software stack, or invested in business intelligence and data-driven product development, they could expense those costs. The write-off incentivized in-house builds and fast growth well outside the capital-T tech sector. This lines up with OECD research showing that immediate deductions foster innovation more than spread-out ones.And American companies ran with that logic. According to government data, U.S. businesses reported about $500 billion in R&D expenditures in 2019 alone, and almost half of that came from industries outside traditional tech. The Bureau of Economic Analysis estimates that this sector, the broader digital economy, accounts for another 10% of GDP.Add that to core tech’s contribution, and the Section 174 shift has likely touched at least 20% of the U.S. economy.AdvertisementThe result? A tax policy aimed at raising short-term revenue effectively hid a time bomb inside the growth engines of thousands of companies. And when it detonated, it kneecapped the incentive for hiring American engineers or investing in American-made tech and digital products.It made building tech companies in America look irrational on a spreadsheet.A bipartisan group of lawmakers is pushing to repeal the Section 174 change, with business groups, CFOs, crypto executives, and venture capitalists lobbying hard for retroactive relief. But the politics are messy. Fixing 174 would mean handing a tax break to the same companies many voters in both parties see as symbols of corporate excess. Any repeal would also come too late for the hundreds of thousands of workers already laid off.And of course, the losses don’t stop at Meta’s or Google’s campus gates. They ripple out. When high-paid tech workers disappear, so do the lunch orders. The house tours. The contract gigs. The spending habits that sustain entire urban economies and thousands of other jobs. Sandwich artists. Rideshare drivers. Realtors. Personal trainers. House cleaners. In tech-heavy cities, the fallout runs deep — and it’s still unfolding.AdvertisementWashington is now poised to pass a second Trump tax bill — one packed with more obscure provisions, more delayed impacts, more quiet redistribution. And it comes as analysts are only just beginning to understand the real-world effects of the last round.The Section 174 change “significantly increased the tax burden on companies investing in innovation, potentially stifling economic growth and reducing the United States’ competitiveness on the global stage,” according to the tax consulting firm KBKG. Whether the U.S. will reverse course — or simply adapt to a new normal — remains to be seen.
    Like
    Love
    Wow
    Sad
    Angry
    368
    0 Comments 0 Shares 0 Reviews
  • TSMC's 2nm wafer prices hit $30,000 as SRAM yields reportedly hit 90%

    In context: TSMC has steadily raised the prices of its most advanced semiconductor process nodes over the past several years – so much so that one analysis suggests the cost per transistor hasn't decreased in over a decade. Further price hikes, driven by tariffs and rising development costs, are reinforcing the notion that Moore's Law is truly dead.
    The Commercial Times reports that TSMC's upcoming N2 2nm semiconductors will cost per wafer, a roughly 66% increase over the company's 3nm chips. Future nodes are expected to be even more expensive and likely reserved for the largest manufacturers.
    TSMC has justified these price increases by citing the massive cost of building 2nm fabrication plants, which can reach up to million. According to United Daily News, major players such as Apple, AMD, Qualcomm, Broadcom, and Nvidia are expected to place orders before the end of the year despite the higher prices, potentially bringing TSMC's 2nm Arizona fab to full capacity.
    Also see: How profitable are TSMC's nodes: crunching the numbers
    Unsurprisingly, Apple is getting first dibs. The A20 processor in next year's iPhone 18 Pro is expected to be the first chip based on TSMC's N2 process. Intel's Nova Lake processors, targeting desktops and possibly high-end laptops, are also slated to use N2 and are expected to launch next year.
    Earlier reports indicated that yield rates for TSMC's 2nm process reached 60% last year and have since improved. New data suggests that 256Mb SRAM yield rates now exceed 90%. Trial production is likely already underway, with mass production scheduled to begin later this year.
    // Related Stories

    With tape-outs for 2nm-based designs surpassing previous nodes at the same development stage, TSMC aims to produce tens of thousands of wafers by the end of 2025.

    TSMC also plans to follow N2 with N2P and N2X in the second half of next year. N2P is expected to offer an 18% performance boost over N3E at the same power level and 36% greater energy efficiency at the same speed, along with significantly higher logic density. N2X, slated for mass production in 2027, will increase maximum clock frequencies by 10%.
    As semiconductor geometries continue to shrink, power leakage becomes a major concern. TSMC's 2nm nodes will address this issue with gate-all-aroundtransistor architectures, enabling more precise control of electrical currents.
    Beyond 2nm lies the Angstrom era, where TSMC will implement backside power delivery to further enhance performance. Future process nodes like A16and A14could cost up to per wafer.
    Meanwhile, Intel is aiming to outpace TSMC's roadmap. The company recently began risk production of its A18 node, which also features gate-all-around and backside power delivery. These chips are expected to debut later this year in Intel's upcoming laptop CPUs, codenamed Panther Lake.
    #tsmc039s #2nm #wafer #prices #hit
    TSMC's 2nm wafer prices hit $30,000 as SRAM yields reportedly hit 90%
    In context: TSMC has steadily raised the prices of its most advanced semiconductor process nodes over the past several years – so much so that one analysis suggests the cost per transistor hasn't decreased in over a decade. Further price hikes, driven by tariffs and rising development costs, are reinforcing the notion that Moore's Law is truly dead. The Commercial Times reports that TSMC's upcoming N2 2nm semiconductors will cost per wafer, a roughly 66% increase over the company's 3nm chips. Future nodes are expected to be even more expensive and likely reserved for the largest manufacturers. TSMC has justified these price increases by citing the massive cost of building 2nm fabrication plants, which can reach up to million. According to United Daily News, major players such as Apple, AMD, Qualcomm, Broadcom, and Nvidia are expected to place orders before the end of the year despite the higher prices, potentially bringing TSMC's 2nm Arizona fab to full capacity. Also see: How profitable are TSMC's nodes: crunching the numbers Unsurprisingly, Apple is getting first dibs. The A20 processor in next year's iPhone 18 Pro is expected to be the first chip based on TSMC's N2 process. Intel's Nova Lake processors, targeting desktops and possibly high-end laptops, are also slated to use N2 and are expected to launch next year. Earlier reports indicated that yield rates for TSMC's 2nm process reached 60% last year and have since improved. New data suggests that 256Mb SRAM yield rates now exceed 90%. Trial production is likely already underway, with mass production scheduled to begin later this year. // Related Stories With tape-outs for 2nm-based designs surpassing previous nodes at the same development stage, TSMC aims to produce tens of thousands of wafers by the end of 2025. TSMC also plans to follow N2 with N2P and N2X in the second half of next year. N2P is expected to offer an 18% performance boost over N3E at the same power level and 36% greater energy efficiency at the same speed, along with significantly higher logic density. N2X, slated for mass production in 2027, will increase maximum clock frequencies by 10%. As semiconductor geometries continue to shrink, power leakage becomes a major concern. TSMC's 2nm nodes will address this issue with gate-all-aroundtransistor architectures, enabling more precise control of electrical currents. Beyond 2nm lies the Angstrom era, where TSMC will implement backside power delivery to further enhance performance. Future process nodes like A16and A14could cost up to per wafer. Meanwhile, Intel is aiming to outpace TSMC's roadmap. The company recently began risk production of its A18 node, which also features gate-all-around and backside power delivery. These chips are expected to debut later this year in Intel's upcoming laptop CPUs, codenamed Panther Lake. #tsmc039s #2nm #wafer #prices #hit
    WWW.TECHSPOT.COM
    TSMC's 2nm wafer prices hit $30,000 as SRAM yields reportedly hit 90%
    In context: TSMC has steadily raised the prices of its most advanced semiconductor process nodes over the past several years – so much so that one analysis suggests the cost per transistor hasn't decreased in over a decade. Further price hikes, driven by tariffs and rising development costs, are reinforcing the notion that Moore's Law is truly dead. The Commercial Times reports that TSMC's upcoming N2 2nm semiconductors will cost $30,000 per wafer, a roughly 66% increase over the company's 3nm chips. Future nodes are expected to be even more expensive and likely reserved for the largest manufacturers. TSMC has justified these price increases by citing the massive cost of building 2nm fabrication plants, which can reach up to $725 million. According to United Daily News, major players such as Apple, AMD, Qualcomm, Broadcom, and Nvidia are expected to place orders before the end of the year despite the higher prices, potentially bringing TSMC's 2nm Arizona fab to full capacity. Also see: How profitable are TSMC's nodes: crunching the numbers Unsurprisingly, Apple is getting first dibs. The A20 processor in next year's iPhone 18 Pro is expected to be the first chip based on TSMC's N2 process. Intel's Nova Lake processors, targeting desktops and possibly high-end laptops, are also slated to use N2 and are expected to launch next year. Earlier reports indicated that yield rates for TSMC's 2nm process reached 60% last year and have since improved. New data suggests that 256Mb SRAM yield rates now exceed 90%. Trial production is likely already underway, with mass production scheduled to begin later this year. // Related Stories With tape-outs for 2nm-based designs surpassing previous nodes at the same development stage, TSMC aims to produce tens of thousands of wafers by the end of 2025. TSMC also plans to follow N2 with N2P and N2X in the second half of next year. N2P is expected to offer an 18% performance boost over N3E at the same power level and 36% greater energy efficiency at the same speed, along with significantly higher logic density. N2X, slated for mass production in 2027, will increase maximum clock frequencies by 10%. As semiconductor geometries continue to shrink, power leakage becomes a major concern. TSMC's 2nm nodes will address this issue with gate-all-around (GAA) transistor architectures, enabling more precise control of electrical currents. Beyond 2nm lies the Angstrom era, where TSMC will implement backside power delivery to further enhance performance. Future process nodes like A16 (1.6nm) and A14 (1.4nm) could cost up to $45,000 per wafer. Meanwhile, Intel is aiming to outpace TSMC's roadmap. The company recently began risk production of its A18 node, which also features gate-all-around and backside power delivery. These chips are expected to debut later this year in Intel's upcoming laptop CPUs, codenamed Panther Lake.
    0 Comments 0 Shares 0 Reviews
  • What Strava Buying 'The Breakaway' App Means for Its Users

    We may earn a commission from links on this page.It looks like Strava is making moves to become more than just a social fitness tracker. The popular fitness app—arguably the best one of its kind—announced Thursday that it has acquired The Breakaway, an AI-powered cycling training app, marking its second major acquisition in just over a month.This follows Strava's purchase of Runna back in April. So, what do these acquisitions mean for users of The Breakaway and Strava alike? Will those apps' specific training plans become available a part of the Strava subscription? Will I have to pay for that whether I like it or not? Here's what you need to know.What The Breakaway brings to StravaThe Breakaway uses AI to create customized training plans for cyclists pursuing specific performance goals. The app analyzes individual fitness data and objectives to generate workouts tailored to each user's needs and schedule. Similarly, Runna offers AI-generated training plans, but focuses on runners rather than cyclists. As people are speculating on Reddit, these apps could represent Strava's strategic push into more personalized training and coaching features.Zooming out, Strava has built its reputation on social fitness tracking. As a loyal Strava user myself, I believe no other running app can beat Strava's social and mapping features. This ability to tap into a community of fellow runners and cyclists has always differentiated Strava from pure tracking apps.Strava's core offering has remained relativelybasic compared to specialized training apps. That said, these acquisitions sure do suggest the company wants to capture more and more of the fitness ecosystem by offering the kind of structured, goal-oriented training that serious athletes need.What this means for pricingCurrent subscribers don't need to worry about immediate price hikes. The Breakaway costs /month, or /year.Strava's free tier lets you post your runs, interact with other users, and track some basic statistics about your performance. The premium tier, at /month or /year, gives you extra performance tracking and mapping tools.And according to statements from Strava, there are no plans to alter pricing structures or eliminate free access to the acquired apps' basic features. Whether this pricing structure will hold long-term remains to be seen, especially as Strava integrates these services into its broader platform.The bottom lineRather than users needing separate apps for social tracking and structured training, Strava appears to be building an all-in-one fitness ecosystem. Even for the most casual users, this could mean access to more training tools without leaving the Strava ecosystem. But as some disgruntled fans are voicing, it can be frustrating to see Strava scoop up AI-powered training features, rather than fix some of its most basic issues.And we can only hope that pricing doesn't get too crazy. We'll see whether users are willing to pay more for what has traditionally been a social-first fitness app. Finally, as Strava continues to expand its feature set, it's worth remembering that the app defaults to public sharing. Regularly review your privacy settings to ensure you're not inadvertently sharing location data or personal information more broadly than intended.
    #what #strava #buying #039the #breakaway039
    What Strava Buying 'The Breakaway' App Means for Its Users
    We may earn a commission from links on this page.It looks like Strava is making moves to become more than just a social fitness tracker. The popular fitness app—arguably the best one of its kind—announced Thursday that it has acquired The Breakaway, an AI-powered cycling training app, marking its second major acquisition in just over a month.This follows Strava's purchase of Runna back in April. So, what do these acquisitions mean for users of The Breakaway and Strava alike? Will those apps' specific training plans become available a part of the Strava subscription? Will I have to pay for that whether I like it or not? Here's what you need to know.What The Breakaway brings to StravaThe Breakaway uses AI to create customized training plans for cyclists pursuing specific performance goals. The app analyzes individual fitness data and objectives to generate workouts tailored to each user's needs and schedule. Similarly, Runna offers AI-generated training plans, but focuses on runners rather than cyclists. As people are speculating on Reddit, these apps could represent Strava's strategic push into more personalized training and coaching features.Zooming out, Strava has built its reputation on social fitness tracking. As a loyal Strava user myself, I believe no other running app can beat Strava's social and mapping features. This ability to tap into a community of fellow runners and cyclists has always differentiated Strava from pure tracking apps.Strava's core offering has remained relativelybasic compared to specialized training apps. That said, these acquisitions sure do suggest the company wants to capture more and more of the fitness ecosystem by offering the kind of structured, goal-oriented training that serious athletes need.What this means for pricingCurrent subscribers don't need to worry about immediate price hikes. The Breakaway costs /month, or /year.Strava's free tier lets you post your runs, interact with other users, and track some basic statistics about your performance. The premium tier, at /month or /year, gives you extra performance tracking and mapping tools.And according to statements from Strava, there are no plans to alter pricing structures or eliminate free access to the acquired apps' basic features. Whether this pricing structure will hold long-term remains to be seen, especially as Strava integrates these services into its broader platform.The bottom lineRather than users needing separate apps for social tracking and structured training, Strava appears to be building an all-in-one fitness ecosystem. Even for the most casual users, this could mean access to more training tools without leaving the Strava ecosystem. But as some disgruntled fans are voicing, it can be frustrating to see Strava scoop up AI-powered training features, rather than fix some of its most basic issues.And we can only hope that pricing doesn't get too crazy. We'll see whether users are willing to pay more for what has traditionally been a social-first fitness app. Finally, as Strava continues to expand its feature set, it's worth remembering that the app defaults to public sharing. Regularly review your privacy settings to ensure you're not inadvertently sharing location data or personal information more broadly than intended. #what #strava #buying #039the #breakaway039
    LIFEHACKER.COM
    What Strava Buying 'The Breakaway' App Means for Its Users
    We may earn a commission from links on this page.It looks like Strava is making moves to become more than just a social fitness tracker. The popular fitness app—arguably the best one of its kind—announced Thursday that it has acquired The Breakaway, an AI-powered cycling training app, marking its second major acquisition in just over a month.This follows Strava's purchase of Runna back in April. So, what do these acquisitions mean for users of The Breakaway and Strava alike? Will those apps' specific training plans become available a part of the Strava subscription? Will I have to pay for that whether I like it or not? Here's what you need to know.What The Breakaway brings to StravaThe Breakaway uses AI to create customized training plans for cyclists pursuing specific performance goals. The app analyzes individual fitness data and objectives to generate workouts tailored to each user's needs and schedule. Similarly, Runna offers AI-generated training plans, but focuses on runners rather than cyclists. As people are speculating on Reddit, these apps could represent Strava's strategic push into more personalized training and coaching features.Zooming out, Strava has built its reputation on social fitness tracking. As a loyal Strava user myself, I believe no other running app can beat Strava's social and mapping features. This ability to tap into a community of fellow runners and cyclists has always differentiated Strava from pure tracking apps.Strava's core offering has remained relatively (and refreshingly) basic compared to specialized training apps. That said, these acquisitions sure do suggest the company wants to capture more and more of the fitness ecosystem by offering the kind of structured, goal-oriented training that serious athletes need.What this means for pricingCurrent subscribers don't need to worry about immediate price hikes. The Breakaway costs $9.99/month, or $69.99/year. (I guess runners are willing to shell out more, since Runna costs $19.99/month, or $119.99/year.) Strava's free tier lets you post your runs, interact with other users, and track some basic statistics about your performance. The premium tier, at $11.99/month or $79.99/year, gives you extra performance tracking and mapping tools.And according to statements from Strava, there are no plans to alter pricing structures or eliminate free access to the acquired apps' basic features. Whether this pricing structure will hold long-term remains to be seen, especially as Strava integrates these services into its broader platform.The bottom lineRather than users needing separate apps for social tracking and structured training, Strava appears to be building an all-in-one fitness ecosystem. Even for the most casual users, this could mean access to more training tools without leaving the Strava ecosystem. But as some disgruntled fans are voicing, it can be frustrating to see Strava scoop up AI-powered training features, rather than fix some of its most basic issues. (Seriously: I should be able to accurately search for for past runs.)And we can only hope that pricing doesn't get too crazy. We'll see whether users are willing to pay more for what has traditionally been a social-first fitness app. Finally, as Strava continues to expand its feature set, it's worth remembering that the app defaults to public sharing. Regularly review your privacy settings to ensure you're not inadvertently sharing location data or personal information more broadly than intended.
    0 Comments 0 Shares 0 Reviews
CGShares https://cgshares.com