Dell and HP are working on an output of their production outside of China. Other groups, mainly Americans, are also seeking to relocate elsewhere, at least in part. Some have already taken the plunge.
It’s not a tech hemorrhage similar to what Russia has been experiencing since it invaded Ukraine. But there are signs that suggest an underlying trend in China: the local production of components and products is no longer as popular as it once was. And large American companies are increasingly on the way to exodus, to source supplies elsewhere.
Two cases illustrate this evolution in the relationship that American tech has with Chinese production lines. January 5, Reuters pointed out, using elements from the Japanese economic newspaper Nikkeithat PC maker HP has begun surveying its suppliers to assess the feasibility of moving production and assembly out of China.
Desire to leave HP and Dell outside of China
This same newspaper reported another piece of information, this time concerning Dell. It turns out that HP’s rival in the computer segment no longer wants to use chips made in China by 2024. The American manufacturer has thus instructed its suppliers to significantly reduce the quantity of “made in China” components in its products.
The initial desires of HP and Dell — two of the world’s three largest computer manufacturers, the first place being occupied by the Chinese company Lenovo — are part of a context of growing tensions between the United States and China at a commercial level on the one hand and at a strategic level on the other. We see it in the chip and miniaturization sector.
The decline of HP and Dell may also have economic reasons. China is facing an uncontrolled epidemic of Covid-19 — we are already considering a million deaths in 2023 in this country alone -, with idling factories or having to stop for lack of employees able to work. This diversification of the supply chain can also be explained by this pandemic which has lasted for three years.
A movement that affects other companies, from Apple to Samsung
Another iconic American tech company is on a similar trajectory: Apple. We have known for a few years that the Cupertino company, to which we owe the iPhone, iPad and Mac, is studying the possibility of relocating part of its production outside of China. The group relies in particular on India, Vietnambut also on a plant in the United States.
In September 2022, TechHQ recalled that other American groups have also distanced themselves from China, whether Google and its production of Pixel smartphone models, or Microsoft (for the Xbox console) and Amazon (for Fire TV devices). Asian countries are the main drop-off points for relocation (India, Vietnam, Malaysia, Thailand, Bangladesh, etc.).
This fundamental movement is also the consequence of the American policy aimed at restricting China’s access to advanced high-tech components. In fact, this also has an impact on other high-tech companies that are not American: we have thus seen relocations decided by Asian groups such as Samsung and sony.
