Dell 2024 Plans Include Phasing Out 'Made In China' Chips
Per Nikkei
As tensions between US and Beijing are rising, Dell, an American computer company, has decided that it is planning to significantly decrease its reliance on "Made in China" chips to phase them out completely by the year 2024 finally.
While most companies, especially tech companies, rely on China for manufacturing, Dell has decided to make a timeline for them to slowly ease of their reliance on China. This move comes as tensions increase between the US and China.
President Biden, in August 2022, decided to ban outright the exportation of AI computing chips to China, per Fortune. These included chips from Advanced Micro Devices Inc. (AMD) and Nvidia Corp.
While Dell supplies a global market, it still comprises a strong percentage of all US PC sales. Per Statista, the company shipped 26.8% of all its PC units to the US, and in Q1 of 2020, it captured a 31.7% market share.
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Although its market share could be far from its Q1 2020 numbers, the US is still a major market for Dell. The company has created a timeline to no longer rely on China-made chips. According to Reuters, the company has also told suppliers that it wants to see smaller numbers regarding made-in-China components.
The report cited three people that were familiar with the topic and noted that Dell already told its suppliers in late 2022 of their plans to reduce their reliance on made-in-China chips.
As the company plans to reduce its reliance on China-made chips, its alternative is to diversify its supply chain. By 2025, Dell is planning to move 50% of its production from China to other parts of the world, per SCMP.
Dell was considered the second-largest CP vendor in China during Q3 2022 when the company could ship 1.53 million units. Despite its plans to decrease its reliance on the country for chips, the company had an 11.7% market share in China during that period.
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