TMTPOST--PC maker HP plans to relocate more than half of its computer production outside China, on concerns over geopolitical risks.

HP has set an internal target to manufacture up to 70% of its notebooks outside China, identifying Singapore and Thailand as potential new production hubs. This strategic move includes establishing a backup design hub in Singapore, with at least five HP suppliers planning to build production facilities and storage areas in Thailand.

Currently, HP maintains significant production operations in China. However, the company is now aligning with other tech giants, such as Microsoft and Apple, which have been diversifying their supply chains away from China and into Southeast Asia over the past two years. This shift has been prompted by disruptions from China's strict COVID policies and escalating trade tensions with the U.S.

U.S. trade restrictions against China, particularly the ban on exporting advanced artificial intelligence technology, are becoming a significant challenge for tech manufacturers. Companies like Nvidia have responded by developing specialized chips for the Chinese market, a move anticipated to drive up costs.

Ernest Nicolas, HP's Chief Supply Chain Officer, said in a recent blog post, "We will continue to invest in our existing long-term operations while sometimes shifting production to other locations to create flexibility and reduce customer risk."

According to IDC, HP shipped approximately 52 million PCs in 2023, second only to Lenovo. HP's accelerated supply chain shift marks a significant departure from its longstanding support for Chinese manufacturing. The company and its suppliers have developed extensive networks in China, with Chongqing emerging as a global PC export hub.