HP Wants To Shift Production Out Of China

As geopolitical tensions which have spilled into the tech space rise between the US and China, California-headquartered HP reportedly wants to shift the majority of its personal computer production away from China.

It currently makes the majority of its PCs in China, and is in talks with suppliers to achieve its target of moving more than half its production outside of the Asian country in two to three years.

It has set an internal goal of eventually making up to 70 per cent of its notebooks outside of China, according to Nikkei Asia.

HP shipped around 52 million PCs in 2023, second only to Lenovo, according to data from research company IDC.

Over the last few decades, HP built a strong network with its suppliers in the country and it will now have to contend with reworking its supply chain in order to support manufacturing outside of China.

“From our supply chain checks, we do find HP and Dell have become much more serious about diversification plans out of China,” said Jeff Lin, a tech analyst with Omdia. “For them, the idea of de-risking becomes very important in their supply chain strategy looking forward.”

While HP is believed to be establishing a “backup” design hub in Singapore, one of the countries where analysts predict that it could take its China production to is Thailand.

At least five HP suppliers are believed to be building new manufacturing facilities or warehouse hubs in that country, and two of them, upon HP’s request, have been raising their capacity there since the beginning of the year.

HP is also believed to be hiring engineers and managers in Singapore to create a backup team for its flagship Taiwan Design Center. The company is reported to be hiring about two hundred additional engineering staff and professionals, including electrical and mechanical engineers and supply chain experts, to turn Singapore into an effective alternative design hub.

As HP gets ready to secure itself a spot among the leading PC manufacturers with AI-capable machines, it has completely overhauled the branding of its PC collections. Most will be familiar with the company’s Pavilion, Envy, and Spectre products, while enterprises may be familiar with its Dragonfly devices. These will now be retired, and other options will be introduced under two main lines: consumer and commercial. These lines include the Omni brand for consumers and the Elite brand for commercial.

HP recently unveiled the first products under each line: the HP OmniBook X AI PC and the HP EliteBook Ultra AI PC.