HP, Microsoft, Google follow Apple in planning China production cuts
After reports that Apple is investigating a production shift out of China, other firms including Sony, Dell and Nintendo are also planning to move manufacturing of devices such as consoles and smart speakers away from the country because of U.S. tariffs.
HP is one of many firms reportedly moving production of notebooks and other devices away from China
Technology firms including Google, Microsoft and HP are reportedly planning to move production of devices ranging from games consoles to laptops and speakers away from China. It is chiefly to avoid tariffs in the U.S.-China trade dispute, but also reflects recent price fluctuations.
"China's hiked production costs have already led to a decline in global orders," an unnamed local government official told Asian news publication Nikkei. "Now, the uncertainties associated with the trade war are adding insult to injury."
Nikkei reports that HP has prepared plans to move between 20% and 30% of its production outside China. The company, which chiefly makes notebook computers, is looking to create a new supply chain in either Thailand or Taiwan.
Dell has also looked at Taiwan and has tested a run of notebook production there, in Vietnam and the Philippines.
Similarly, Amazon is believed to be targeting Vietnam for its Kindle and Echo products. Nintendo is also considering Vietnam, and Microsoft is investigating both Thailand and Indonesia.
These plans have not been affected by last weekend's unexpected truce between the President Trump and China's President Jinping.
"There's no turning back," trade economist Darson Chiu of the Taiwan Institute of Economic Research told Nikkei. "It is not only about tariffs but also about reducing risks for the long term [such as rising labor costs]"
"Southeast Asian countries and India will together become new competitive hubs in [the] coming years for electronics production," he continued.
According to Nikkei, each of these companies has been planning for many months, and in some cases before Apple.
"The industry consensus is to move an average of 30% of production out of China [and] everyone needs to come up with a plan," an unnamed supply chain executive said. "Apple is really the very last and the slowest to start formulating plans, while everyone else out there is much more aggressive."
Apple has previously been reported to be planning for such a move since late last year. It also recently announced the opposite, that Mac Pro production would be done in China.
Neither Apple nor most of the companies in the Nikkei report have commented. However, Acer and Asustek confirmed that they are investigating.
Dell reportedly declined to comment directly about the shift but said it hopes to see the trade dispute end. "[Dell encourages] the US and Chinese governments to continue dialog to resolve outstanding issues," said a spokesperson.
HP is one of many firms reportedly moving production of notebooks and other devices away from China
Technology firms including Google, Microsoft and HP are reportedly planning to move production of devices ranging from games consoles to laptops and speakers away from China. It is chiefly to avoid tariffs in the U.S.-China trade dispute, but also reflects recent price fluctuations.
"China's hiked production costs have already led to a decline in global orders," an unnamed local government official told Asian news publication Nikkei. "Now, the uncertainties associated with the trade war are adding insult to injury."
Nikkei reports that HP has prepared plans to move between 20% and 30% of its production outside China. The company, which chiefly makes notebook computers, is looking to create a new supply chain in either Thailand or Taiwan.
Dell has also looked at Taiwan and has tested a run of notebook production there, in Vietnam and the Philippines.
Similarly, Amazon is believed to be targeting Vietnam for its Kindle and Echo products. Nintendo is also considering Vietnam, and Microsoft is investigating both Thailand and Indonesia.
These plans have not been affected by last weekend's unexpected truce between the President Trump and China's President Jinping.
"There's no turning back," trade economist Darson Chiu of the Taiwan Institute of Economic Research told Nikkei. "It is not only about tariffs but also about reducing risks for the long term [such as rising labor costs]"
"Southeast Asian countries and India will together become new competitive hubs in [the] coming years for electronics production," he continued.
According to Nikkei, each of these companies has been planning for many months, and in some cases before Apple.
"The industry consensus is to move an average of 30% of production out of China [and] everyone needs to come up with a plan," an unnamed supply chain executive said. "Apple is really the very last and the slowest to start formulating plans, while everyone else out there is much more aggressive."
Apple has previously been reported to be planning for such a move since late last year. It also recently announced the opposite, that Mac Pro production would be done in China.
Neither Apple nor most of the companies in the Nikkei report have commented. However, Acer and Asustek confirmed that they are investigating.
Dell reportedly declined to comment directly about the shift but said it hopes to see the trade dispute end. "[Dell encourages] the US and Chinese governments to continue dialog to resolve outstanding issues," said a spokesperson.
Comments
As Winston Churchill pointed out: "Americans always do the right thing -- after they've tried everything else"
And it’s a lot of everything else. This is a big topic that could be written in pages and pages. In short, western world shouldn’t rely on communist China to build their goods unless China change their behavior.
Becoming reliant on manufacturing in a repressive Communist country that is our #1 geopolitical rival, one that refuses to enforce IP rights (have you seen Xiaomi’s new “Mimojis”???) and rips off everything American countries do with impunity, was a bad idea from the start. Shifting away from Chinese dependence was inevitable and is overdue.
By the way, Tariffs were how the Federal Government used to fund it's self. As for higher prices. Some things, the companies will eat the cost and make less profit. At least for a while, hoping the tariffs don't last to long. Others will eat part of the cost and prices go up a little, and others, well you will pay more. At some point the Tariffs will end and the U.S. will be better off. China on the other hand,.....They're already hurt and the longer they hold out hurts them more and more and businesses start to flee. It won't happen overnight as these things take time. But already, those wanting to go to China are now taking a second look else ware and those already in China are looking outside of China and will start moving some, maybe all of their business else ware. There are a lot of other countries that will play fair and by the rules. It may take 30 years. It should be a interesting future for sure.
Yeah it's a shame because while i feel the current president is a very poor one, I wouldn't be so crazy as to take the opposite opinion as him on everything just because. That defies reason.
I have stepped foot in China, when I studied it in university. While I have sympathy for the people of China, their method of governance is entirely corrupt, violent, murderous, authoritarian, and cheats. Part of that is cultural, as merchants often try to cheat unless caught, and then it's a game of saving face.
Six heads of US intelligence agencies are in agreement that China and the CCP is a threat to democracy and international communications. These are the same heads that said Russia interfered in our election. I believed them then, and I believe them now. China is not friendly, is a threat, and is exporting authoritarianism. Their world order is not the one I want to live in or put trust in.
https://www.baldingsworld.com/2019/06/17/is-china-exporting-authoritarianism/
I see the stealings because China's business is much inferior than US. Even Huawei CEO admitted that Apple is his teacher.
Or are you going to fall back on the old standby's like:
"they're a repressive regime". (Even though Trump LOVES repressive regimes)
No, it's all nonsense. So, you best stick to attacking anybody critical of Trump and his nutsy policies.
We have Trump attacking one of our leading trading partners for mostly unsubstantated, discredted, phony reasons, American job creators beggng hm to stop, and Americans facing Trump Taxes on the goods they depend on. And meanwhile Trump continues to cozy up to the leader of the country who not attacked us but continues to attack us (which is likely why he's creating various wars -- to distract from the real one).
But, yeh, go ahead and say it's all "just because" if it makes you feel better.