HP Moving Some Production out of China

Although the United States’ latest threat of a new 25-percent tariff on some $300 billion of China imports that would include printers, copiers, and PCs is on hold for now, the Nikkei Asian Review reported today that HP Inc., along with some other tech companies, is seeking to move some of its production out of China.

According to the Nikkei Asian Review, HP Inc., Dell, Microsoft and Amazon are all looking to shift “substantial production capacity out of China, joining a growing exodus that threatens to undermine the country’s position as the world’s powerhouse for tech gadgets.”

HP and Dell, the world’s number-one and number-three personal-computer makers, respectively, and who together have about 40 percent of the global personal-computer market, are planning to reallocate up to 30 percent of their notebook production out of China, several sources told the Nikkei Asian Review.

Although U.S. President Donald Trump and Chinese President Xi Jinping negotiated a tariff truce of sorts at last weekend’s G20 summit, multiple sources said the situation “was still too uncertain, while rising costs in China were also prompting manufacturers to examine alternatives.”

A local government official is said to have told the Nikkei Asian Review that HP has lowered its production forecast for 2019 to fewer than 10 million laptops, or about half of its output two years ago.

HP is said to be building a new supply chain in Thailand or Taiwan, with production beginning as soon as the end of September. So far, the production shift appears to involve PCs, and not printers, copiers, or their supplies.

Two other office-imaging equipment companies have also begun shifting some production out of China. In May, Ricoh Company announced that it’s shifting  production of its key MFP portfolio destined for the U.S. market to Thailand, in order to “hedge any risk associated with the US-China trade issue.” In June, Konica Minolta also said it was shifting some production out of China in response to the trade war.

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