American PC giant HP has announced that it will shift some of its PC production from China to Mexico and Thailand and later to Vietnam this year.

Some of HP’s PC production would shift from China to Mexico and Thailand this year. Next year, the American PC manufacturer also wants to add Vietnam to its list. Nikkei Asia reports this.

Across the border

HP is currently negotiating with various suppliers to make this move possible. This would include production of both business notebooks (Mexico) and commercial laptops (Thailand). Next year, part of laptop production would be relocated to Vietnam. It’s the first significant step HP is taking to diversify its production beyond Chinese borders.

In the global ranking of PC manufacturers, HP is in second place, behind Lenovo from China. According to HP, production outside the country would be two to five million units. That’s less than ten percent of the more than 55 million units the company shipped last year. HP’s newer laptops include the Dragonfly G4 and the Specter x360 16.

Both new locations offer specific advantages. There are already similar manufacturers in Thailand and that would make the transition easier for HP. Mexico is an ideal starting point for the North American market. In a statement to Nikkei, the company emphasized the continued importance of its Chinese manufacturing facilities.

HP’s decision follows other tech giants such as Apple and Dell, both of which are putting significantly more pressure on the Vietnamese map. This also means that the two companies are initially turning their backs on China to a much greater extent than HP, which is more open about its relocation plans.

Several factors play a role in these decisions:

• The geopolitical situation in (Southeast) Asia
• Rising production costs in China
• More difficult recruitment
• Rising labor costs
• Political tensions between the USA and China

Although HP has been present in China for decades and therefore has ties to the country, insiders say there are many discussions with Vietnamese electronic component manufacturers about moving production to Thailand. The fact that HP only has a market share of 7.5 percent in China certainly also plays a role.