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HP moves PC production from China

Translate from : HP flytter PC-produktion fra Kina

America's leading PC maker, HP, will recall more than half of computer production away from China. The company also plans to set up a "backup" design hub in Singapore in an effort to reduce geopolitical risks surrounding China and Taiwan, Nikkei Asia reports.

The plans are the most aggressive move made by the PC maker and involve pulling its supply chains away from Asia's biggest economy. The company, which currently manufactures its PCs in China, is in discussion with suppliers on this issue.

Nikkei Asia reports, citing sources, that HP has set its sights on achieving its goal in two to three years. One such source said the company has set internal targets to produce 70 percent of its notebooks outside of China.

A likely destination for the production shift is Thailand. Notably, five suppliers to the technology company are already setting up new production units and warehouses in Thailand. In addition, since the beginning of the year, two such suppliers have increased their capacity there at the request of HP. "It is certain that HP is investing heavily in building a manufacturing hub in Thailand. We have other facilities in Southeast Asia to support the client, but they said it is not efficient enough, so we are building a new factory in Thailand now, which they've requested," said one of HP's supply chain executives.

An executive working for another HP supplier welcomed the move, saying: "We were concerned that we didn't have enough orders to fully utilize our facility in Thailand, but since earlier this year we have received more inquiries from HP to build components locally. Our business in Thailand is quite busy now." In 2023, HP produced approximately 52 million PCs.

The accelerating supply chain transfer from China marks a change from its decades-long stance as a supporter of China-based manufacturing. The company and its suppliers used to build an extensive network in China, eventually turning Chongqing, a city on the mainland, into the world's leading source of PC exports, according to Nikki Asia.

But years of political tension between the US and China and disruptions that occurred during COVID have prompted many US companies to move away from China. In the past, tech giants such as Dell, Apple, Microsoft and others have also moved some of their PC production to other Southeast Asian countries and allocated more marketing resources to explore their local sales.

A veteran tech analyst said assembling or producing AI-capable PCs in China could potentially pose a risk to the supply chain if Washington decides to tighten export controls for powerful chips. Intel, for example, is already barred from shipping its Core Ultra 9 chip for AI PCs to Huawei, the analyst claimed.