HP Inc. and Dell Technologies Inc. plan to move as much as 30% of their notebook production away from China, the Nikkei cited anonymous sources as saying, as global technology giants try to avoid escalating tariffs on USA -bound goods. Effects of the continued trade war are already forcing China-based companies who rely heavily on USA technology products, to find greener pastures outside of the region such as Foxconn Technology who have moved production efforts to Mexico and the Czech Republic.
While Google, Amazon, and Microsoft are especially concerned over relocating the production of gaming consoles, e-readers, and smart speakers, Dell and HP are anxious about notebooks which are made in the he Chinese cities of Chongqing and Kunshan.
It follows the Nikkei Asian Review also reporting that Apple wants to reduce its exposure to China because of ongoing uncertainty around the trade war. Sources told Nikkei that HP and Dell, the number one and number three personal computer manufacturers which account for 40 percent of the global market, may relocate up to 30 percent of their notebook production to countries outside of China. President Donald Trump and his Chinese counterpart President Xi Jinping have agreed to re-open talks, throwing tariffs that would affect most consumer electronics and PCs into an unclear place. Other sources suggested Lenovo, Acer and Asus are "evaluating plans to shift".
Citing multiple sources, Nikkei reports that all five companies have been scouting various other Asian countries as potential new homes for electronics production.
"The industry consensus is to move an average of some 30% of production out of China depending on how important the US market is..."
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Amazon and Nintendo are looking to move parts of the production of their products like Echo speakers, Kindle, and the Nintendo Switch to Vietnam.
Arguably when US-based companies move production out of the U.S., it's a cost-based measure allowing them to maximize profits by dispersing production procedures over a myriad of regions where labor and technologies are cheaper.
Amazon and Nintendo are both looking at Vietnam as a potential new base for supply chains, and Microsoft is reportedly looking at Thailand and Indonesia.
HP, Dell, Amazon, Microsoft, and Google did not immediately respond to a Reuters' request for comment.