Dell Technologies is making a major shift in its supply chain following the increasing tensions between the United States and China. According to Nikkei, the technology giant has announced plans to stop using chips manufactured in China by 2024 and has asked suppliers to reduce other components made in the country as well. This decision is likely prompted by US President Joe Biden’s tough stance on China and his administration’s October announcement of export controls, which included sanctions on Chinese memory chipmaker YMTC and 21 artificial intelligence chip companies.
PC maker HP has also started surveying its suppliers to evaluate the feasibility of moving production and assembly away from China. In addition, Dell has requested that product assemblers and providers of other components, such as electronic modules and printed circuit boards, help create capacity in countries outside of China, like Vietnam. This move towards diversifying its supply chain reflects the Trump administration’s decision to cut off certain semiconductor chips made with US tools from China. The former president had previously placed sanctions on Huawei, accusing it of being an arm of the Chinese government – something that was followed up by stopping Google from collaborating with the tech giant.
The response from Dell Technologies indicates that they are taking measures to ensure their products are not reliant on any single source for components or materials. To meet these goals, they need to find new solutions that will deliver quality while also addressing their growing security concerns regarding data privacy and intellectual property rights in China. With reports suggesting that similar efforts may be seen throughout the PC industry due to rising tensions between the two countries, it will be interesting to see how this trend develops over time.
