By 2024, Dell, the third-largest computer manufacturer in the world, plans to discontinue utilizing CPUs and semiconductors made in China. Hewlett-Packard is also polling its suppliers to determine whether a shift away from Chinese operations would be viable. By the end of 2024, Dell wants all of its chips, electronic modules, and circuit boards to be produced in non-Chinese factories.
Dell has made the choice to broaden its market access at a time when tensions between the US and China over chip manufacturing are high. Due to the failure of its domestic market to generate any semiconductor products that might compete with those made in the United States, China has been reducing its spending in this area. Despite this, China continues to dominate the semiconductor industry.
Dell has already started to diversify its market access and lessen its reliance on chips made in China by moving parts of its supply chain to nations like India, Vietnam, and the Philippines. Additionally, Dell has made investments in a number of new factories across the country, one of which is in Austin, Texas. One of the biggest semiconductor factories in the world, this new facility will make a range of chips for Dell’s products.
Since roughly two-thirds of Dell’s chips are presently made in China, the company is taking a big risk by shifting away from Chinese manufacturing. The business will probably encounter problems replacing sources, and output quality will perhaps decline. Dell must take this action in order to stay competitive in the increasingly complicated global market.
The important choice Dell made to broaden its market access might have a huge impact on how the United States and China compete in the chip market. If successful, the initiative might help Dell take the top spot in the world’s semiconductor industry and create new possibilities for the business.