HP Plans to Move PC Production from China to Thailand and Singapore
HP, a leading American PC maker, is planning to shift over half of its computer production from China to reduce geopolitical risks. The company aims to achieve this in two to three years, with Thailand and Singapore as key locations.
Currently, HP manufactures its PCs in China, but discussions with suppliers are underway to change this. The company has set internal targets to produce 70% of its notebooks outside China. Thailand is a probable destination, with five suppliers already building new manufacturing units and warehouses there. Two of these suppliers have increased their capacity since the beginning of the year at HP’s request.
An executive in HP’s supply chain mentioned, “It is certain that HP is betting big on building a production hub in Thailand. We have other Southeast Asian facilities to support the client, but they said it is not efficient enough, so we’re building a new factory in Thailand now, as requested.” Another supplier executive welcomed the move, stating, “We were worried about not having enough orders to fully use our Thailand facility, but since earlier this year, we’ve been receiving more requests from HP to build components locally. Our business in Thailand is quite busy now.”
In 2023, HP shipped around 52 million PCs. This shift marks a significant change from its long-standing support of China-based manufacturing. The company and its suppliers had built an extensive network in China, making Chongqing a leading source of PC exports. However, US-China tensions and COVID-19 disruptions have driven many American companies to move away from China. Tech giants like Dell, Apple, and Microsoft have also shifted portions of their production to Southeast Asia.
A tech analyst noted that producing AI-capable PCs in China could be a supply chain risk if Washington tightens export controls for high-powered chips. For instance, Intel is already barred from shipping its Core Ultra 9 chip for AI PCs to Huawei.
Doubts Revealed
HP -: HP is a big company from America that makes computers and printers.
PC Production -: PC production means making personal computers, which are the computers we use at home or in offices.
China -: China is a large country in Asia where many companies make their products because it’s cheaper.
Thailand -: Thailand is a country in Asia, known for its beautiful beaches and temples.
Singapore -: Singapore is a small but very advanced country in Asia, known for its cleanliness and technology.
Geopolitical risks -: Geopolitical risks are problems between countries that can affect businesses, like arguments or trade issues.
Suppliers -: Suppliers are companies that provide parts or services to make a product.
Facilities -: Facilities are buildings or places where things are made or done.
Tech giants -: Tech giants are very big and important technology companies, like Dell and Apple.
US-China tensions -: US-China tensions are disagreements and problems between the United States and China.
COVID-19 disruptions -: COVID-19 disruptions are problems caused by the COVID-19 pandemic, like delays and shutdowns.
