According to Commercial Times, PC giant HP is rumored to start a new wave of organizational changes in Taiwan on October 15th. In addition to the potential layoffs of 20 to 30 local employees in the R&D department, other senior managers may be subject to the adjustment as well. In response to these rumors, HP Taiwan has not provided any comments.

Business Today indicated that the restructuring of HP Taiwan may be associated with the “Taiwan+1” policy, as supply chains gradually reshuffle to Southeast and South Asia to reduce geopolitcal risks.

Previously, Dell also reduced its workforce as part of a reorganization of its sales teams, as per a report from The Business Times. On the other hand, Dell has already begun producing some of its laptops in India to serve the local market.

Tech companies are now facilitating the relocation of supply chains to reduce the impact of geopolitical risks. A report from Nikkei indicated that HP has significantly reduced the Taiwan team’s influence in procurement decisions and has created related positions in Singapore as part of a major supply chain restructuring intended to mitigate geopolitical risks.

According to Commercial Times, HP announced its adjustment plans in 2022, stating that by the 2025 fiscal year, it would reduce its global workforce by 10%, impacting 4,000 to 6,000 employees. Now, rumors indicate that HP Taiwan’s R&D department is expected to see layoffs of 20 to 30 employees, and even senior executives, including vice presidents, may be affected.

HP reported revenue of USD 13.52 billion for the third quarter of fiscal year 2024 (ending July 31, 2024), marking a 2.4% annual increase, as noted by Commercial Times. This performance exceeded Wall Street’s forecast of USD 13.37 billion and ended eight consecutive quarters of decline, signaling a return to growth.

However, its quarterly net profit was only USD 640 million, reflecting an annual decrease of 16.4%. Additionally, HP has lowered its fiscal year 2024 outlook due to intense market competition. According to Commercial Times, the company now estimates that the full-year adjusted net profit per share will be between USD 3.35 and USD 3.45, lower than its previous forecast of USD 3.30 to USD 3.60.

Business Today mentioned that HP expects that AI PCs will help stimulate market recovery. The company aims to increase AI PC shipments to about 50% of its total PC shipments by 2027, hoping to boost the average selling price by 5 to 10%.

However, Business Today also pointed out that compared to Lenovo and Dell, HP has been relatively slow in deploying AI PCs. If HP hopes to rely on AI PCs for performance growth, it may need to navigate a challenging period ahead.

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• [News] Tech Giants’ Supply Chain Reshuffle: from China to Southeast and South Asia

(Photo credit: HP)

Ahead of AMD’s October launch of Instinct MI325X, the U.S. chip giant is said to have several issues with its laptop OEMs, which results in poor execution, a report by Tom’s Hardware notes. Citing remarks from analysts, the report describes the two parties’ relation now as a “Cold War ice age,” hurting their mutual trust.

The report, citing AC Analysis, says that the main contradiction arises from AMD’s current strategy of prioritizing enterprise chips over consumer products, with laptop OEMs complaining about the “miscommunication, unfulfilled promises, and generally poor treatment.” The situation, according to them, is similar to Intel’s behavior during its peak years.

It is interesting to note that the situation seems to coincide with AMD CEO Lisa Su’s recent exclamation that AMD is a “data center-first company,” as data center contributed to over 50% of the company’s revenue last quarter.

Another report by German media outlet ComputerBase also reports that AMD is still suffering from the same challenges it has had in the past. For instance, problems with supply and related issues have delayed the release of new Strix Point laptops. According to ComputerBase, one source even accused AMD of probably leaving billions of US dollars on the table with its partners over the years.

Tom’s Hardware observes that due to the aforementioned reasons, the reaction of AMD’s Strix Point chips among OEMs has been somewhat tepid, despite consumer interest.

The report notes that currently, BestBuy offers only three brands with AMD’s latest chips—Asus, HP, and MSI. HP and MSI each have one model, while Asus has 13 models featuring the AMD Ryzen AI 300 series chip.

This is in sharp contrast with Qualcomm, the report notes. Even the company is a latecomer in the laptop market, the smartphone chip giant’s launch of the Snapdragon X processor generated significant excitement among both the public and laptop manufacturers, as seven brands have already released 12 different models featuring the new Arm chip.

AMD is also lagging behind its rival Intel, which still dominates the laptop market despite its recent slump. According to Intel, its Lunar Lake, manufactured with TSMC’s 3nm, is expected to power more than 80 new laptop designs across more than 20 original equipment manufacturers, delivering AI performance at a global scale for Copilot+ PCs.

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(Photo credit: AMD)

China has long been the preferred location for tech companies to establish their supply chains. However, in recent years, the decline in population dividends has led to rising labor costs, and the need for tech companies to mitigate the impact of geopolitical risks has prompted them to accelerate the relocation of supply chains out of China, with some shifting production capacity to Southeast Asia and South Asia.

Recently, as per a report from TechNews citing sources, it’s indicated that HP is considering moving more than half of its personal computer production away from China to countries like Thailand and Vietnam.

This move is primarily aimed at significantly reducing its reliance on China’s supply chain, as well as addressing global trade dynamics and the need to lower costs.

In addition to HP, several well-known tech companies are also shifting their supply chains to Southeast Asian and South Asian countries.

• Apple

One notable example of supply chain relocation is Apple. Having long relied on China’s supply chain, Apple is now finding that the era of full dependence on China is coming to an end due to political and commercial pressures.

iPhone

As one of Apple’s most important products, iPhone has been a key focus in this shift.

Although supply chain diversification was always part of Apple’s strategy, the plan has been accelerated following a series of disruptions at Foxconn’s Zhengzhou plant during the pandemic. These events have compelled Apple to expedite its efforts to diversify its supply chain.

According to a report from Business Standard, since April of this year, Apple has assembled iPhones worth USD 14 billion in India, with 14% of iPhones now being manufactured there.

Rajeev Chandrasekhar, India’s former Union Minister of State for Electronics and Information Technology, also stated on the X platform that by 2028, it is estimated that up to 25% of iPhones will be made in India.

iPad

In addition to iPhone, Apple has also started shifting part of its iPad production to Vietnam. Foxconn is responsible for manufacturing iPads in Vietnam, where mass production and shipments are already underway.

MacBook

Similarly, the MacBook production line has been partially moved out of China and relocated to Vietnam, which is primarily produced by Quanta and Foxconn in their Vietnamese facilities.

Earlier rumors cited by Nikkei have suggested that Apple was considering shifting some of its production to Thailand as well. However, Thailand’s supply chain for key components is not yet fully developed, with many parts still reliant on imports from China.

The associated transportation costs and the risk of potential damage during transit have led Apple to prioritize setting up production lines in Vietnam first.

Nevertheless, Thailand’s strong electronics manufacturing infrastructure and cost advantages make it a potential future production site for Apple.

The Japanese Ministry of Economy, Trade, and Industry’s 2024 White Paper on International Economy and Trade reveals that in its examination of imported goods sources, over half of the import value for 1,406 product categories (accounting for over 30% of the total) comes from China. This figure is 1.5 times higher than that of the United States, which relies on China for only 567 product categories. Thus, Japanese media Nikkei’s report has highlighted that this data underscores Japan’s significant dependence on China within its supply chain.

According to Nikkei, Japan’s trade statistics for 2022 covered approximately 4,300 types of goods. The report indicates that nearly 40% of these products are highly dependent on a single import source, with China being the predominant supplier.

Specific data further hints that Japan’s highly dependent imports from China include laptops, air conditioners, organic chemicals, and rare-earth metals. Additionally, over 90% of Japan’s imported household appliances originate from China. Moreover, China serves as Japan’s primary supplier of phosphorus, a key raw material for fertilizer production.

The data also indicates that Japan imports 252 and 151 types of goods that are “highly dependent” on the United States and South Korea, respectively, ranking these countries second and third in terms of Japan’s import dependency. In contrast, other G7 members exhibit lower levels of dependency on single import sources compared to Japan.

Per Nikkei’s report, essential minerals, semiconductors, and fertilizers have been designated as critical goods by the Japanese government. The data in the latest White Paper indicates that Japan’s supply chain is significantly dependent on China, highlighting the importance of diversifying procurement sources and conducting risk assessments. Japan has already started implementing measures to reduce reliance on China in cooperation with the United States and Europe.

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(Photo credit: Lenovo)

According to a report from Notebookcheck citing market rumors, it’s suggested that the AMD Zen 6 architecture, codenamed Morpheus, will utilize 2nm and 3nm processes. The Zen 6 series includes three versions: Standard, Dense Classic, and Client Dense. Later rumors also indicate the architecture will feature three core configurations: 8-core (Zen 6), 16-core (Zen 6c), and 32-core (Zen 6c Extended).

The same report further indicates that, in the consumer market, the Zen 6 series will include high-end laptop versions like Medusa Point, platform versions for AM5 like Medusa Ridge, and versions suitable for both gaming laptops and desktops like Medusa Halo. AMD plans to launch the Zen 6 architecture in the second quarter of 2025, with production starting by the end of 2025, though mass production might be delayed to 2026.

AMD unveiled Strix Point at COMPUTEX 2024, featuring a combination of the Zen 5 series and RDNA 3.5 architecture. Strix Point’s launch was delayed by two quarters due to issues related to AMD’s plans for 3nm production, which were eventually canceled.

AMD also had plans for Strix Halo, rumored to use TSMC’s N3E process for producing IOD (input/output die) chips similar to Medusa Halo. Strix Halo’s launch was also delayed, possibly due to issues with the IOD chip.

Compared to the Zen 5 series architecture, the Zen 6 series is expected to feature a nearly redesigned memory controller and a new scheduling program. The Zen 6 architecture represents a significant overhaul similar to the Zen 2 architecture, with substantial changes. AMD is said to be looking to finalize the Zen 6 series design by the third quarter and commence production in 2025.

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(Photo credit: AMD)