Dell Plans to Phase Out Chinese Chips from PCs by Next Year
fliptop writes:
'This trend looks irreversible,' supplier exec says of tech industry's production shift:
Dell plans to cease using chips produced in China in its products by 2024 amid concerns over tensions between the U.S. and China, reports Nikkei citing sources familiar with the PC maker's plans.
It is unclear whether Dell can indeed replace all chips made by companies like SMIC and Hua Hong by next year from all of its designs and how this affects its costs.
[...] There are several reasons why Dell wants to stop using chips produced in China in its products. First up, the company will diversify its supply chain. Secondly, U.S. lawmakers late in 2021 considered banning devices that feature chips made in China from using by government organizations due to national security concerns. The government did not proceed with the idea, but certainly Dell wants to ensure that its gear does not get banned by U.S. legislators even if they prohibit usage of hardware featuring China-made chips by government agencies, which are among its major clients.
[...] All large U.S.-based PC makers transferred their production to China in the recent couple of decades, which helped to create a fully-fledged supply chain in the country. But rising labor costs in China and growing tensions between the People's Republic and the U.S. have urged PC makers to diversify their supply chains.
Apple reportedly plans to produce some of its MacBooks in Vietnam starting 2023, whereas numerous server makers are transferring their production to Taiwan. Even Foxconn, the world's largest contract maker of electronics, has been establishing presence in India and Vietnam for a while, which is not easy as Vietnam still lacks sufficient engineering talent.
Related:
- China's Government, State-Backed Firms to Scrap Foreign PCs Within Two Years
- Foxconn to Shift Some Apple Production to Vietnam to Minimize China Risk
- China Trade War Could Push iPhone Contractor Foxconn to Build in Mexico
Read more of this story at SoylentNews.