Microsoft, Google, HP are planning to follow Apple to cut hardware production in China to avoid tariffs in the US-China trade war. Besides these three technology giants, Sony, Dell, Nintendo are also reportedly planning to move the hardware production out of China for similar reasons.
“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.”
According to Nikkei, HP to move between 20% and 30% of its hardware production outside China and is currently planning to create a new supply chain in either Thailand or Taiwan.
Dell is also planning to shift its production houses out of China and they are planning to move to Taiwan, Vietnam, and Phillippines.
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.
These companies’ plan to move out of China comes at a time when Huawei is in the process to resume the business with American companies after US president Donald Trump officially lifted the Huawei ban at G20 summit, which was held a few days back.
“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.”
Nikkei also reported that these companies have been planning to move out of China for many months, well before Apple. “Apple is really the very last and the slowest to start formulating plans, while everyone else out there is much more aggressive,” an unnamed supply chain executive said.
However, we haven’t heard anything official from these companies. Neither Apple nor most of the companies in the Nikkei report have commented( via AppleInsider).