HP already knows how to start reducing its dependence on China: taking part of its production to Mexico and Thailand

The world has changed substantially in recent years, at least for technology companies that, in addition to offering digital products, market electronic devices. the numerous supply problems caused by the pandemic together with the economic war between China and the United States are some of the reasons that are leading them to rethink their production schemes.

The reorganization is underway. Companies the size of Apple and Google have begun to set foot outside the Asian giant, known as “the world’s factory,” a title it has held for years with no apparent rival. The success of factories beyond its borders, although at a slow pace, continues. HP will be the next US company to relocate part of its production.

HP and the goal of diversifying production

The world’s second-largest PC maker, behind China’s Lenovo, is seeking to “improve the resilience” of its supply chain, according to Nikkei. The axis of the plan to achieve this consists of redistribute production of their laptops between three new locations: Thailand, Mexico and Vietnam. The changes, explains the aforementioned medium, will be implemented gradually.

The first stage will begin this year, with the manufacture of new devices in Thailand and Mexico. The later stage will arrive next year, with production also in Vietnam. This last country, let us remember, has hosted the manufacture of various Apple devices and other technology firms, making it a recurring destination for those players seeking to move away from China.

Despite this scenario, SCMP collects, from HP they assure that they will continue to have ties with the Asian giant and qualify the movements as alternatives to create flexibility and mitigate risks. “China is a very important part of our global supply chain and we remain deeply committed to our operations in Chongqing,” a company spokesperson said.

The Palo Alto, California-based computer maker even plans to increase its presence in China in areas such as research and development. In fact, they point out, they opened an R&D center in Chongqing, a district in which they also have a 20,000-square-meter manufacturing facility.

Other foreign companies, however, have a somewhat more dramatic perspective of what is happening. Hideo Tanimoto, the president of the printer manufacturer Kyocerapoints out that manufacturing products for export in China no longer makes sense, so much of its economic model has been compromised.

“It works whenever [los productos] are manufactured in China and sold in China, but the business model of producing in China and exporting abroad is no longer viable,” the executive said in a interview with Financial Times. This reality, according to Tanimoto, is mainly due to trade sanctions from the United States.

Images: Mika Baumeister | Cinerama14

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