Google, Amazon, Microsoft look to move some production out of China, report says
Several major electronics makers are preparing to move some of their production out of China amid the trade war between Washington, D.C. and Beijing.
Nikkei Asian Review reported that sources told them PC makers HP and Dell are planning to relocate as much as 30 percent of their notebook production out of China. And multiple sources also told them that Microsoft, Google, Amazon, Sony and Nintendo are also considering moving some of their game console and smart speaker manufacturing elsewhere.
President Trump and Chinese President Xi Jinping agreed to restart trade talks after meeting at the G-20 summit in Japan last week for the first time since negotiations fell apart in early May. But the trade tensions have added a layer of uncertainty for businesses operating in both countries.
HP is looking at building a supply chain in Thailand or Taiwan, Nikkei Asian Review reported. Dell has started a pilot run of production in Taiwan, Vietnam and the Philippines. Amazon and Nintendo have also been looking at Vietnam, while Microsoft has been mulling a move to Thailand and Indonesia, according to the report.
Apple was reportedly considering moving as much as 30 percent of its smartphone production out of China to elsewhere in Southeast Asia. But just last week, The Wall Street Journal reported that Apple was moving production of its Mac Pro computers from the U.S. to China.
Companies that build data center servers, including Quanta Computer, Foxconn Technology and Inventec, have moved some production out of China in order to avoid more tariffs, Nikkei Asian Review reported.
All these moves could be significant losses for China, which is the top exporter of cellphones and computers according to data collected by worldstopexports.com. Darson Chiu, an economist at the Taiwan Institute of Economic Research, told Nikkei Asian Review that it could mean China faces more competition as a base of electronics production.
“Southeast Asian counties and India will together become new competitive hubs in coming years for electronics production,” Chiu said.
Other companies that have said they’re moving at least some production out of China include GoPro, Hasbro, Steve Madden, Stanley Black & Decker, Brooks Running and Whirlpool Corp.
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The U.S. could also feel some impact from the shifts out of China as some products could become more expensive, according to the report.
“But China would feel the rest as the country’s economy will have to brace for a further slowdown and many factory workers need to look for jobs elsewhere,” Chiu said.
FOX Business’ Megan Henney and Joe Williams contributed to this report.
