Dell Plans to Phase Out Chinese Chips from PCs by Next Year
Dell is reportedly planning to stop using chips made in China in its products by 2024 amid concerns over tensions between the US and China. Nikkei It cites sources familiar with the PC maker’s plans.
It’s unclear if Dell will actually be able to replace all chips made by companies like SMIC and Hua Hong from all designs by next year, and how this will affect costs.
Dell’s eventual plan is to phase out Chinese chips by 2024, but even before that, the company plans to slash Chinese ICs from its products, the company said last year. It is reported that the supplier was informed at the end. His company, the world’s third largest PC maker, said it wants to stop using chips designed by Chinese companies and made in China, as well as ICs designed by foreign companies and made in Chinese facilities. It is
There are several reasons why Dell wants to stop using Chinese chips in its products. First, the company diversifies its supply chain. Second, in late 2021, US lawmakers considered banning government agencies from using devices with chips made in China over national security concerns. The government didn’t go ahead with the idea, but Dell’s equipment was threatened by U.S. congressmen even as it banned the use of hardware with Chinese chips by government agencies, one of its major clients. I would like to avoid being banned.
China-based chip makers such as SMIC and Hua Hong produce display driver ICs (DDICs), power management ICs (PMICs), and various microcontroller units (MCUs) for a wide variety of PCs, displays, keyboards, mice, etc. We produce relatively simple chips such as product. Meanwhile, companies like Samsung and SK Hynix make his 3D NAND and DRAM chips in Chinese facilities, while Micron operates testing and packaging facilities in China. Dell has not confirmed any plans to replace Chinese chips in its products by 2024, but says it is “continuously looking to diversify its supply chains around the world.”
“Laptops have thousands of components, and the Chinese ecosystem has been very mature and complete for many years,” said an executive at a chipmaker that supplies chips to both Dell and HP. said. Nikkei“Previously, I knew Dell had plans to diversify out of China, but this time it’s kind of radical. I don’t even want to manufacture them. […] It’s not just an evaluation, it’s not a crybaby. This is really an ongoing project and the trend seems irreversible. ”
All kinds of chips from all made in china, especially bearing in mind that many devices are made by third parties and it’s not always easy to figure out what they use. is a difficult task.
All major US-based PC makers have moved their production to China in recent decades, helping to build full-fledged supply chains in China. However, rising labor costs in China and rising tensions between the People’s Republic and the United States are forcing PC makers to diversify their supply chains.
Apple will reportedly produce some MacBooks in Vietnam from 2023, but many server makers have moved production to Taiwan. Even Foxconn, the world’s largest contract manufacturer of electronics, has established a presence in India and Vietnam for some time, but Vietnam still lacks sufficient engineering talent, which is why this is not easy.
However, it is unclear whether or how such supply chain diversification affects the price of finished goods.