HP plans aggressive shift away from China amid geopolitical risks- Nikkei Asia

Investing.com-- PC maker HP Inc (NYSE:HPQ) is planning to shift more than half of its computer production away from China amid concerns over geopolitical risks with Taiwan, Nikkei Asia reported.

HP has set an internal goal of making up to 70% of its notebooks outside China, and is looking at Singapore and Thailand as potential production destinations, the Nikkei report said.

The firm is setting up a backup design hub in Singapore, while at least five HP suppliers are building production facilities and storage areas in Thailand, the Nikkei report said. 

HP has a major production presence in China and Taiwan, but now appears to be joining a slew of its technology peers in diversifying its supply chain away from the region.

Peers such as Microsoft Corporation (NASDAQ:MSFT) and Apple Inc (NASDAQ:AAPL) were seen shifting production away from China and into Southeast Asia over the past two years, amid disruptions from China’s strict zero-COVID policies and as trade tensions with the U.S. grew.

U.S. trade restrictions against China are set to become a bigger point of contention for tech manufacturers in the country, especially after Washington banned the export of advanced artificial intelligence technology to China. 

This has led to manufacturers such as NVIDIA Corporation (NASDAQ:NVDA) developing chips specifically geared towards the Chinese market- a move that is also expected to increase costs. 

Tensions with Taiwan have also increased in recent years, as China kept up its rhetoric of reuniting the island with the mainland. But Taiwan has largely rejected such calls, and is a major recipient of U.S. defense aid.

HP is the world's second-biggest maker of personal computers, behind only Lenovo, as of end-2023.