In a strategic move to reduce geopolitical risks and diversify their supply chain, HP is reportedly planning to withdraw over half of its PC production lines from China. According to a report from Economic Daily News, this decision comes amidst ongoing tensions between the US and China, prompting companies to seek alternative manufacturing locations. ODMs such as Quanta and Inventec have already taken steps to set up operations in Thailand to meet the growing demand for production outside of China.
Quanta, a leading ODM, established a plant in Thailand back in 2019 to cater to the needs of its clients for diversified manufacturing sites. Initially focusing on manufacturing Chromebooks and consumer electronics, Quanta has since expanded its operations to include servers and laptops. With HP now increasing its production in Thailand, Quanta is well-positioned to leverage its established presence in the country to secure more orders and expand its market share.
In a similar vein, Inventec had originally planned to assist HP with laptop production in Mexico. However, with HP’s decision to relocate its main production base to Thailand, Inventec quickly adapted by renting local plant space to secure customer orders. At the end of last year, Inventec announced a significant investment of USD 152 million in a new plant in Thailand dedicated to producing laptops and servers. The server production line is expected to be completed by the end of this year, with operations commencing in the first quarter of next year. Similarly, the laptop production line is also slated for completion in the first quarter of next year.
The shift towards manufacturing in Thailand is part of a broader trend among tech companies to diversify their production locations and reduce reliance on China. This move not only helps mitigate geopolitical risks but also allows companies to tap into new markets and benefit from lower production costs in countries like Thailand. Quanta and Inventec’s expansion into Thailand reflects the growing importance of Southeast Asia as a manufacturing hub for tech products.
Overall, HP’s decision to transfer its manufacturing base to Thailand signals a significant shift in the tech industry’s supply chain dynamics. As companies like Quanta and Inventec ramp up their operations in Thailand, they are poised to capitalize on the increasing demand for production outside of China. This strategic move not only benefits the companies involved but also underscores the importance of supply chain diversification in today’s volatile geopolitical landscape.