Picture courtesy: Bangkok Biz News

 

Hewlett-Packard (HP) is exploring a significant shift in its production strategy, aiming to relocate a substantial portion of its PC manufacturing operations from China to Thailand. This move is influenced by ongoing geopolitical concerns and potential risks associated with the US-China relationship.

 

HP, an American IT giant, is reportedly in discussions with its suppliers to execute this transition within the next two to three years, as highlighted by a recent Nikkei Asia report. The company aspires to have up to 70% of its notebook production outside of China eventually. Additionally, HP is planning to establish a backup design hub in Singapore to further diversify its operations.

 

According to the report, HP is actively coordinating with at least five suppliers to set up new manufacturing and warehouse facilities in Thailand. Since the beginning of the year, two of these suppliers have been expanding their capacities at HP’s request. An executive involved with the plans commented, "HP is betting big on building a production hub in Thailand. While we have other Southeast Asian facilities, they were deemed insufficient, prompting the need for a new factory in Thailand.”

 

Other sources within HP have emphasised the growing business opportunities in Southeast Asia and the Middle East, while also pointing out the geopolitical risks associated with maintaining a large manufacturing base in China. These risks have been exacerbated by ongoing US-China tensions and disruptions caused by the Covid-19 pandemic.

 

HP's strategic shift underscores the broader trend of companies reassessing their reliance on Chinese manufacturing amid global supply chain uncertainties. By exploring new production hubs in Thailand, HP aims to mitigate potential disruptions and leverage new markets, ensuring business continuity and growth in a volatile global landscape.

 

-- 2024-08-09

 

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3 hours ago, webfact said:

This move is influenced by ongoing geopolitical concerns and potential risks associated with the US-China relationship

Knowing Thailands relationship with Xi I'm not sure that move is in HP's best interests.

Vietnam would be a cheaper and more trustworthy option.