Microsoft denies it is moving its hardware production out of China


9, 2019

Last week Nikkei reported that numerous technology companies, including Microsoft, were planning to follow Apple and cut hardware production in China to avoid tariffs in the US-China trade war.

“China’s hiked production costs have already led to a decline in global orders,” a local government official told news publication Nikkei. “Now, the uncertainties associated with the trade war are adding insult to injury.”

Today CNET reports that a Microsoft spokesperson has officially denied the claim.

“The reporting from Nikkei Asia Review on Wednesday was inaccurate and does not reflect Microsoft’s manufacturing plans in China in any way,” a Microsoft spokesperson told CNET in an emailed statement Monday night.

Lenovo also denied the claims, but HP said they were monitoring the situation, but would not comment on rumours and speculation.

Nikkei had earlier claimed that HP planned to move between 20% and 30% of its hardware production outside China and was planning to create a new supply chain in either Thailand or Taiwan.

They also said Microsoft is targetting Thailand and Indonesia for hardware production, while tech giant Amazon is said to be eyeing Vietnam for their Echo and Kindle production.

Relationships between China and USA has thawed in recent weeks, but companies remain skittish, and continue to make contingency plans.

“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]”

Chiu continued saying, “Southeast Asian countries and India will together become new competitive hubs in [the] coming years for electronics production.”

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