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Dell Technologies Inc. is reportedly planning to phase out chips from China and hopes to achieve this by next year. The company was said to have told its suppliers to minimize and lessen the number of China-made components that they use in their products.
As per Reuters, Dell Technologies informed its suppliers in the last part of 2022 that it is aiming to significantly reduce the number of Chinese chips it uses for its computer parts. The company further told them that it does not want parts that were manufactured in facilities owned or operated by non-Chinese companies as well.
The plan was revealed amid concerns related to tensions existing between the United States and Beijing. Additionally, Dell wants its suppliers of other computer parts, such as print circuit boards and modules, to help boost capacities in other countries like Vietnam.
Dell’s rivals in the business, like HP Inc., are also revealed to have started assessing its suppliers to determine the viability of moving production away from China, including assembly. At any rate, Nikkei Asia reported that the company’s main goal right now is to have all semiconductor products being installed in its products to be made in manufacturing facilities outside of China by 2024.
This decision has been described as one of the latest examples of how a tech war between the U.S. and China could affect companies in the field of electronics and others where semiconductors are used.
"The goal is quite aggressive. The determined shift involves not only those chips that are currently made by Chinese chipmakers but also at the facilities in China of non-Chinese suppliers," the source who has direct knowledge of the matter stated. "If suppliers don't have responding measures, they could eventually lose orders from Dell."
