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PC Makers Planning To Move Some Production Out Of China: Report

Manufacturers including HP, Dell and Lenovo are considering the shift amid the U.S.-China trade war, according to the Nikkei.

HP Inc. and Dell Technologies reportedly have plans to shift up to 30 percent of their production of notebooks to locations outside China in response to the ongoing U.S.-China trade war.

A Nikkei report on the plans also mentions Lenovo, Microsoft and Amazon among the other device makers that are mulling an "electronics exodus from China."

[Related: Tariffs Proposal Slammed By Apple, Microsoft, Dell, Intel And HP]

In a June letter to U.S. Trade Representative Robert Lighthizer, HP, Dell and Microsoft warned against additional tariffs on products such as laptops and tablets.

"U.S. laptop manufacturers currently rely on Chinese suppliers to satisfy U.S. demand for laptop products. Transitioning to alternative supply sources is not feasible in the near term," the companies wrote in the letter, which was also signed by Intel. "As a result, the proposed tariffs threaten to substantially increase the cost of laptops in the United States. Higher laptop prices for our customers, including cost-conscious small businesses, families, and students, and even including the U.S. Government, will diminish demand for laptops, which will threaten to impair productivity growth for the U.S. economy as a whole."

The Nikkei report, which cites unnamed sources, said the companies are primarily looking to shift their production of products intended for sale in the U.S.

HP has plans to relocate between 20 percent and 30 percent of its Chinese production, with new manufacturing sites in Taiwan or Thailand under consideration, the report said. HP's shift could begin "as early as the end of the July-September quarter but it is still subject to change," the Nikkei reported

HP has "a diverse global supply chain to help us to mitigate risks wherever possible," the company said in a statement provided to CRN. Citing a policy to "not comment on rumors or speculation about future plans," HP did not specifically address the Nikkei report.

The company "shares industry concerns that broad-based tariffs harm consumers by increasing the cost of electronics," HP said in the statement. "We are actively monitoring the situation and will continue to work with government officials to advocate for the best interests of customers, partners and consumers."

Meanwhile, Dell Technologies is already piloting production of notebooks in Taiwan, the Philippines and Vietnam, the Nikkei report said. Dell declined to comment in an email to CRN.

In addition, Microsoft is considering Thailand and Indonesia for production of game consoles, while Amazon is eyeing Vietnam for manufacturing of Echo smart speakers and Kindle e-readers, according to the report. Microsoft and Amazon did not immediately respond to a request for comment Friday.

In a statement to CRN, Lenovo said it "has no plans to move manufacturing out of China."

"In fact in May we announced a US$300M investment in a new smart manufacturing facility in Shenzhen," Lenovo said in the statement. "As a global company, operating in 180 markets around the world, Lenovo is well positioned thanks to the geographic balance of our business and manufacturing footprint that combines both in-house and outsourced manufacturing capabilities.”

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