Dell is downsizing its manufacturing in China, canceling branches aims to st...

By Li Panpan

US computer maker Dell is downsizing its presence in China and plans to stop using components made in China by 2024, according to media reports by Nikkei Asia and JW Insights. This latest twist indicates US’s government policy on decoupling with China started to take effect on the PC-making supply chain.

Data from Tianyancha, provider of Chinese corporation data and due diligence platform, shows that Dell canceled eight branches among its 20 plus subsidiary companies in China, learned JW Insights.

Dell China was established in Xiamen of southern China’s Fujian Province in 1997, according to Tianyancha.

Nikkei Asia reported on January 5 that “Dell aims to stop using chips made in China by 2024 and told suppliers late last year that it aims to ‘meaningfully lower’ the amount of China-made chips it uses, including those produced at facilities owned by non-Chinese chipmakers”.

The world's third-largest computer maker by shipments, Dell has asked suppliers of other components, such as electronic modules and print circuit boards, and product assemblers to help prepare capacity in countries beyond China, like Vietnam, the Nikkei Asia report said.

South China Morning Post reported on January 5 that Dell reportedly plans to move about 50% of its production out of China by 2025.

The move is the latest example of how the tech war between the U.S. and China is accelerating electronics makers' efforts to diversify production away from Asia's biggest economy, noted Nikkei Asia’s sources.

Another chip company executive told Nikkei Asia, "Previously, we knew Dell kind of had plans to diversify from China, but this time it is kind of radical. They don't even want their chips to be made in China, citing concerns over the US government's policy.”

Dell's domestic rival HP has also started surveying its suppliers to gauge the feasibility of moving production and assembly away from China, according to Nikkei Asia’s sources.

Dell and HP, which together shipped more than 133 million notebook and desktop computers in 2021, according to data provider Canalys, have most of their assembly in the Chinese cities of Kunshan, eastern China’s Jiangsu Province, and Chongqing in the country’s west.