Tuesday, September 12th 2023
HP to Move PC Production to Mexico, Thailand, and Vietnam
According to the latest report from Nikkei, HP, the world's second-largest PC manufacturer after Lenovo, is making strategic shifts in its laptop production bases. In a move that reflects broader trends among tech giants, HP is collaborating with various Electronic Manufacturing Service (EMS) providers to move a significant part of its laptop production out of China to other countries such as Thailand, Mexico, and eventually Vietnam. For 2023 alone, the production outside of China is expected to range from a few million units up to 5 million, a noteworthy figure given HP's total global PC shipments of 55.2 million units. Commercial notebooks are slated for production in Mexico, catering to HP's primary market, North America, with consumer laptops made in Thailand. Additionally, a shift to Vietnam is on the horizon for 2024. Thailand's mature PC supplier ecosystem is anticipated to facilitate a smoother transition for HP.
HP's reconfiguration of manufacturing locations aligns with similar initiatives by other tech giants. Dell, for example, is also reducing its reliance on Chinese-made chips and aims to manufacture at least 20% of its laptops in Vietnam this year. Apple has likewise commenced MacBook production in the same country. Several factors are driving these relocations, with rising manufacturing costs in China, including labor recruitment challenges and increased labor costs, being key among them. Geopolitical tensions between the U.S. and China also weigh in on these decisions, especially since the U.S. is a crucial market for both HP and Dell. Despite the diversification, HP reaffirms its commitment to continue operations in China, particularly in Chongqing, a significant laptop production hub since 2008.
HP's reconfiguration of manufacturing locations aligns with similar initiatives by other tech giants. Dell, for example, is also reducing its reliance on Chinese-made chips and aims to manufacture at least 20% of its laptops in Vietnam this year. Apple has likewise commenced MacBook production in the same country. Several factors are driving these relocations, with rising manufacturing costs in China, including labor recruitment challenges and increased labor costs, being key among them. Geopolitical tensions between the U.S. and China also weigh in on these decisions, especially since the U.S. is a crucial market for both HP and Dell. Despite the diversification, HP reaffirms its commitment to continue operations in China, particularly in Chongqing, a significant laptop production hub since 2008.