Dell intends to move 50% of its production capacity out of China! The target is to be completed in 2025, and HP is also evaluating the feasibility

U.S. computer manufacturer Dell (Dell) has reportedly set a goal of stopping using Chinese-made chips by 2024 and has told suppliers that it will “significantly reduce” The amount of Chinese-made components in the product. The goal is to move 50% of production capacity out of China by 2025.

Dell is the world’s third largest computer maker by shipments. Nikkei Asia (Nikkei Asia) quoted people familiar with the matter as reporting that the company told customers at the end of last year that it wanted to significantly reduce the number of Chinese-made chips used in its products, including non-Chinese chip manufacturers in China. Products produced by the factory.

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According to people familiar with the matter, Dell’s goal is to have all the chips used in its products produced by factories outside China by 2024.

This news highlights the technology war between the United States and China, which is prompting technology companies to accelerate their search for production sites outside China and diversify their supply chains.

One of the sources said that Dell set a big goal to stop not only chips produced by Chinese chipmakers, but also chips produced by non-Chinese suppliers in Chinese factories.

Dell’s rival in the United States, Hewlett-Packard, is also said to be evaluating the feasibility of moving production lines out of China.

In addition to chips, Dell also requires suppliers of other components such as electronic modules and PCBs, as well as product assemblers to prepare for production in Vietnam and other places.

Dell and Hewlett-Packard originally purchased chips from chip developers without worrying about where they are produced, but the change in attitude has surprised the industry.

A director working for Dell and HP suppliers revealed that laptops have tens of thousands of parts, and a mature and complete ecosystem has been established in China over the years, although I have heard that Dell intends to promote supply chain diversification. , Reduce dependence on China, “But this time they took drastic measures, and even did not allow chips to be manufactured in China, on the grounds of doubts about the US government’s policy. This is not just an assessment or rhetoric, but a real and ongoing plan. The trend looks irreversible.”

In the face of Nikkei’s confirmation, Dell said that the company continues to seek diversification of the global supply chain, and emphasized that China is still an important market, and has a local team and customers.

After the United States announced the imposition of export controls on China in October last year, SMIC said in November last year that some US chip developers had become conservative in placing orders.

Most of the production lines of Dell and HP are located in China, such as Kunshan, Jiangsu, Sichuan, and Chongqing. Since Apple also plans to start producing MacBook computers in Vietnam before the middle of this year, Vietnam has become a potential production base for the two companies’ main production lines.

In order to meet Dell’s goal, the entire supply chain has been activated. The world’s largest factory for laptop power supplies has been shipped. The Thailand factory that was originally built to meet customer needs will be opened in June this year. It is understood that including power supplies As for the transformer production line of key components of the supplier, Group Electric will also consider whether to transfer part of its production capacity to Thailand depending on the situation.

As for Compal and Wistron, the two major foundries of Dell laptops, Compal’s existing production capacity of the two phases of the Vietnamese factory is almost full. At the end of 2022, Compal announced that it will spend 60 million US dollars to establish Vietnam The new plant covers an area of ​​more than 40 hectares. Compal only said that the new plant plans to produce many kinds of products, but anyone with a discerning eye will know that a large part of the new plant in Vietnam is prepared for Dell’s needs. Wistron’s notebook production lines in Taiwan and Vietnam will account for 40% of the total production capacity in 2025.

Counterpoint technology analyst Ivan Lam said that in the next 5 to 10 years, more electronics production bases will emerge, such as India, Southeast Asia, and Latin America, and may not only transfer production lines, but also expand to components.

Source: Business Times, Juheng.com

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