HP to Relocate PC Assembly to Thailand, Mexico, and Vietnam: Report

HP
(Image credit: HP)

HP is working with various electronic manufacturing service (EMS) providers to transfer a significant portion of its laptop production from China to Thailand, Mexico, and eventually Vietnam, reports Nikkei. This move is part of a broader trend among tech giants to diversify their manufacturing bases, with geopolitical tensions and rising costs in China being primary drivers.

As the world's second-largest PC manufacturer, following Lenovo, HP's decision to relocate its production is notable. The company plans to produce some of its commercial notebooks in Mexico, while consumer laptops will be manufactured in Thailand. Additionally, there's an upcoming shift to Vietnam slated for 2024. The production outside of China for this year is projected to be between a few million to 5 million units, a significant number considering HP's global shipment of 55.2 million PCs in 2023.

Thailand's existing infrastructure of PC suppliers is expected to ease HP's transition. Meanwhile, producing in Mexico aligns with HP's strategy to cater more efficiently to its primary market, North America. Despite these changes, HP remains committed to its operations in China, particularly in Chongqing, a city it helped develop into a major laptop production hub since 2008.

This strategic move by HP mirrors similar decisions by other tech behemoths. Dell, for instance, has been actively working to decrease its dependency on chips made in China. The company also set a target to manufacture at least 20% of their laptops in Vietnam this year. Similarly, Apple has also initiated MacBook production in Vietnam. 

The overarching reason for these shifts is multifaceted. While geopolitical concerns between the U.S. and China play a role, there are also practical considerations. China's escalating manufacturing costs, including challenges in labor recruitment and rising labor costs, are pushing companies to explore more cost-effective alternatives. The U.S. being a significant market for both HP and Dell further underscores the strategic importance of these moves.

Anton Shilov
Contributing Writer

Anton Shilov is a contributing writer at Tom’s Hardware. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.

  • vern72
    China's rising costs?!? Big corporations are running out of places to find cheap labor!
    Reply
  • magbarn
    Will this result in HP finally putting in decent screens on their laptops for once? Out of Lenovo, Dell, and Asus, HP puts the crappiest, dimmest, off color screens in their laptops. I'm bitter because of the company I work for only provides HPs for their employees.
    Reply
  • tamalero
    vern72 said:
    China's rising costs?!? Big corporations are running out of places to find cheap labor!
    no, they just want never-ending lower costs.
    Aka when the "low costs" becomes the norm after x amount of years.. greed takes over and they demand even more.
    Reply
  • bill001g
    It is could also be a project they started back in the covid days showed them that if china shuts down they have no product to sell. Large companies like HP move extremely slowly. It is still likely all about costs but even if say it cost more to manufacture in mexico they at least have a product to sell if one the other sites is shut down.
    Reply
  • usertests
    vern72 said:
    China's rising costs?!? Big corporations are running out of places to find cheap labor!
    There's plenty of places. It can take a while to develop them up to the point of being a go-to manufacturing location.

    tamalero said:
    no, they just want never-ending lower costs.
    Aka when the "low costs" becomes the norm after x amount of years.. greed takes over and they demand even more.
    Or they want to disentangle before "geopolitical tensions" hit their apex with their supply chains shut down and assets seized.
    Reply
  • gg83
    Every company that has international sales should source labor from multiple geographic locations. It's smart and spreads the money around.
    Reply
  • tamalero
    gg83 said:
    Every company that has international sales should source labor from multiple geographic locations. It's smart and spreads the money around.
    Except in most cases, these are used to replace the high priced workers in the main country they are from.
    Thats how China rose anyway.. everyone wanted "cheap labour quick".
    Reply