With the ongoing trade conflict between the United States and China, major tech companies are planning to move their production out of China. Although there’s been a truce between both the nations, with the United States notably allowing China’s Huawei to once again do business with suppliers in the country, major tech companies are still concerned over the growing uncertainty.
Nikkei is reporting that HP, Dell, Microsoft, Google, Amazon, Sony, and Nintendo are planning to move parts of their hardware production from out of China to other Southeast Asian countries:
- HP is planning to move around 20% to 30% of its production out of China to a new supply chain in Thailand or Taiwan by the end of the quarter.
- Dell has already started a pilot run of notebook production in Taiwan, Vietnam, and the Phillippines, with the company also planning to move around 30% of its production out of China.
- Amazon and Nintendo are looking to move parts of the production of their products like Echo speakers, Kindle, and the Nintendo Switch to Vietnam.
- Microsoft is looking at Thailand and Indonesia as alternatives, too.
- Lenovo, Acer, and Asus are also evaluating plans to move parts of their production out of China.
Following the tariff of 25% on imports from China to the United States placed by the U.S. government, there’s been a ton of uncertainties for businesses in both the economies. The growing threat of further tariffs has pushed U.S. tech companies to look at other nations as alternatives to China, with companies like Apple and Foxconn already starting mass-production of the iPhone in countries like India.
The recent truce is obviously promising, but that doesn’t necessarily eliminate the chances of any future conflicts between the countries. Thus, tech companies are trying to secure a safe future by thinking long-term and moving away from China. But with China’s economy relying heavily on the manufacturing of phones and computers, it’s probably going to take a major hit.