Several U.S.-based big tech companies are considering exercising the option of shifting larger amount of their production out of China because of the bitterly increasing trade spat between Washington and Beijing, the Nikkei reported on last week, citing sources.
Personal computer makers Dell Technologies and HP Inc, who together hold about 40% of the global markets, are in plans of reallocating a major share of up to 30% of their notebook production out of China, while Alphabet Inc, Sony Corp, Amamzon.com Inc, Nintendo Co Ltd and Microsoft Corp are also planning to move some of their smart speaker and game console manufacturing operations out of the country, according to the Nikkei.
The U.S.-based tech giants will be joining a growing mass departure of the technology companies that threatens to weaken the China’s position as the world’s powerhouse for tech gadgets.
Lenovo Group, Asustek Computer and Acer are among the other leading PC makers that are also considering plans to shift out of the country, report said.
The truce struck at Group of 20 summit in Osaka last weekend between U.S. President Donald Trump and Chinese President Xi Jinping also failed to make tech companies to change their plans as uncertainty of the situation is still at its highest, while rising cost to continue manufacturing in China is also another reason forcing the companies to evaluate alternate options.
Other manufacturing companies in China are also reviewing their manufacturing strategies following decision of shifting their production out from China, by some of the world’s biggest game console and computer makers with most of their product destined for the United States.
U.S.-based customers of elsewhere manufacturers of products like networking equipments, servers and key electronic components are also requesting them to shift their production out of China.
China is the world’s biggest producer of smartphones and PCs and its decade-long growth was largely driven by the electronics exports, but the current moves by manufacturer in the country will be a blow for its exports.