HP, Dell, Microsoft, and Amazon are the latest companies to consider moving some of their hardware production out of China in light of the ongoing trade war with the US. Nikkei reports that HP and Dell are both looking to move up to 30 percent of their laptop production out of the country, Microsoft may move some Xbox production, and Amazon could move some production of its Kindles and Echo speakers. Acer and Asustek are also exploring production outside of China, according to the report.
The potential moves are all in response to a trade war that has seen the US put a 25 percent tariff on $200 billion worth of goods. While the technology industry has largely remained unscathed, new tariffs could soon extend the fees to laptops, smartphones, and game consoles, adding significant costs that could result in higher prices for consumers and slimmer margins for manufacturers.
These four companies aren’t the only large tech names looking to shift their manufacturing. Nikkei previously reported that Apple is looking at moving up to 30 percent of its hardware production out of China, The Wall Street Journal said that Nintendo might move some Switch production, and Bloomberg said that Google has moved some production of Nest products. Most companies are still looking to keep hardware production in Southeast Asia, with manufacturing moving to a number of countries.
Hardware production has long been centered on China where production costs are cheaper, components of the tech supply chain are concentrated, and manufacturers have increasingly specialized in making cutting-edge tech. That’s been the status quo for two decades, but the tariff situation is quickly showing how tenuous the situation is, with the ongoing trade dispute potentially driving up costs across the industry and companies having no easy way out.
https://www.theverge.com/2019/7/3/20680789/hp-dell-microsoft-amazon-hardware-production-move-china-trade-war
2019-07-03 13:06:33Z
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