[News] AI-Driven Component Costs Reportedly Push HP, ASUS, Acer to Shift Some PC Production Back to China
Rising component costs are prompting major PC makers to reconsider their manufacturing strategies, with some production reportedly shifting back to China. According to Nikkei, citing industry sources, leading PC brands including HP, ASUS, and Acer are moving part of their production from Thailand and Vietnam back to China. Dell, the world’s third-largest PC maker after Lenovo and HP, is also reportedly considering a similar move.
The shift comes as surging AI demand drives shortages of memory and storage chips, raising PC bills of materials and prompting manufacturers to seek greater production efficiency, Nikkei notes. According to TrendForce, CPU, DRAM, and SSD costs accounted for approximately 68% of a mainstream notebook’s bill of materials (BOM) in the third quarter of 2026, up from 45% in the first quarter of 2025.
The development also represents a partial reversal of the global technology supply chain’s “China+1” diversification strategy, under which manufacturers shifted production from China to Southeast Asia amid escalating U.S.-China tensions and trade restrictions, Nikkei points out.
TrendForce estimates that the share of global notebook production outside China will decline from approximately 24% in 2025 to 21% in 2026, potentially falling below 20% in 2027. The outlook suggests that PC brands are reassessing the balance between supply chain diversification and manufacturing efficiency as policy and cost conditions evolve.
Looking ahead, TrendForce expects global notebook shipments to decline by a low-single-digit percentage in 2027, with the drop potentially widening to a high-single-digit rate if elevated DRAM and CPU prices are passed on to consumers.
Chinese Contract Manufacturers Eye Opportunities as Taiwanese Rivals Expand AI Server Focus
Growing demand for AI servers is also reshaping the PC contract manufacturing landscape. According to Nikkei, Taiwan’s Quanta Computer, Compal Electronics, Inventec, and Foxconn have long dominated global PC contract manufacturing but are increasingly focusing on higher-margin AI data center servers. This shift is creating opportunities for smaller Chinese manufacturers, including Luxshare, Huaqin Technology, and Longcheer Technology, to secure more PC orders.
The growing AI server business may also be strengthening Taiwanese ODMs’ bargaining power. According to Taiwan People News, Quanta reportedly suspended HP notebook production for about a week in September amid a dispute over rising component costs, with operations resuming after further negotiations. With servers accounting for over 80% of Quanta’s revenue in the second quarter of 2026, supply chain sources suggest the company has gained greater leverage in notebook pricing negotiations. Meanwhile, Chinese ODMs are reportedly offering lower upfront costs, including waiving engineering and tooling fees, to compete for PC orders.
In addition to efficient production and a skilled workforce, Chinese contract manufacturers benefit from access to domestically produced memory chips, according to Nikkei. These advantages have become increasingly important as PC makers face weaker bargaining power in securing memory supplies amid the global shortage.
Read more
- Rising Costs Threaten Notebook Demand in 2027, Raising Risks of Shipment Declines and Price Increases, Says TrendForce
- [News] CXMT Reportedly Eyes Second Beijing 12-inch DRAM Fab; HP, Asus, and Acer Said to Begin Limited Use
(Photo credit: HP)
