Major PC makers are shifting production back to China as costs rise HP, Asus among firms moving work in efficiency push

Date:
Wed, 04 Nov 2026 02:10:00 +0000

Description:
Memory and CPUs now make up about 68% of a mainstream laptop's parts bill,
and HP and Asus are reportedly heading back to China to claw back savings elsewhere.

FULL STORY ======================================================================Copy link Facebook X Whatsapp Reddit Pinterest Flipboard Threads Email Share this article 0 Join the conversation Follow us Add us as a preferred source on Google Newsletter Subscribe to our newsletter HP and Asus are moving some PC production from Thailand and Vietnam back to China as AI-driven component costs climb The work is going to Chinese assemblers like Luxshare and Huaqin rather than Taiwan's server-focused ODMs, partly for access to Chinese memory TrendForce expects the share of notebooks built outside China to slip from
24% to 21% this year, with no sign yet of cheaper PCs as a result of said
move back to the country HP and Asus have started moving some of their PC manufacturing out of Thailand and Vietnam and back into China, as AI-driven price increases for memory, storage, and other components eat into already-thin hardware margins.

The shift was reported by Nikkei Asia , whose reporters Lauly Li and Cheng Ting-fang cited unnamed industry sources. Acer is also among the brands rebalancing output, while Dell , the world's third-largest PC maker, is reportedly evaluating a similar move as manufacturers chase efficiency amid ballooning bills of materials. Latest Videos From TechRadar Watch full video here: Reversing the China+1 strategy as memory silicon costs hit home The
move partly reverses the "China+1" strategy the industry has pursued since
the first round of US-China trade tensions.

Nikkei reported in 2023 that HP planned to move a large share of its laptop production out of China, and some PC makers even explored building plants in Saudi Arabia to sidestep tariffs on Chinese-made goods. Asus told investors
in August 2025 that it had already shifted more than 90% of its US-bound motherboard and PC production to Thailand, Vietnam and Indonesia. You may
like Global memory shortage forces top PC makers like HP and Asus to turn to CXMT chips AI price gouging might have indirectly hit HP's notebook output as supplier reportedly halted shipment Microsoft stops recommending 32GB, as Apple reportedly struggles to get RAM

"The move is really driven by cost pressures," a chip industry executive
whose company supplies all major PC makers told Nikkei. The executive added that prices have climbed sharply for far more than just memory, leaving PC makers struggling to absorb the increases, and that Chinese contract manufacturers are winning work largely because they can undercut on price.

The scale of the squeeze shows up in the bill of materials (BOM). According
to TrendForce , processors, DRAM and SSDs accounted for roughly 68% of a mainstream notebook's BOM in the third quarter of 2026, up from about 45% in the first quarter of 2025. Are you a pro? Subscribe to our newsletter Sign up to the TechRadar Pro newsletter to get all the top news, opinion, features
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Omdia arrives at a similar picture from a different angle, with memory and storage rising from around 15% of a PC's total price to roughly 40%,
according to figures reported previously by TechRadar Pro .

The move is a bit interesting considering that relocating assembly does not make DRAM cheaper; It implies that roughly a third of the bill, plus
assembly, logistics and engineering costs, is the only place a factory move can save money, unless the new factory also comes with cheaper memory.

That is, however, precisely the pitch from Chinese contract manufacturers: a supply chain manager told Nikkei that these firms are marketing better access to Chinese-made memory chips to prospective clients, and TrendForce reports that they are waiving engineering and tooling fees to win orders. China also keeps an edge in peripheral and structural parts that other countries still struggle to match, Counterpoint analyst Ivan Lam told Nikkei. What to read next Chinese RAM surge through 2028 isn't likely to help the average consumer Laptop sales are in freefall and price hikes could mean 2027 is worse still The RAMpocalypse has led global PC shipments to drop 20 percent in just 12 months

The memory angle is not theoretical by any measure: HP, Asus and Acer qualified DRAM from China's CXMT around mid-2026 and have begun shipping it
in small volumes, in a handful of notebooks sold outside the United States. A lack of leverage meets new players vying for orders More interestingly, the brands are not going back to their traditional partners; Quanta, Compal, Inventec and Foxconn, which have long dominated PC contract manufacturing,
are pouring capacity into higher-margin AI servers.

That leaves room for Chinese assemblers such as Luxshare, Huaqin Technology and Longcheer Technology to win PC orders, and one supplier executive told Nikkei these firms are actively sending representatives to court the big brands with lower prices.

Who builds the machines may matter as much as where they are built. Servers made up more than 80% of Quanta's revenue in the second quarter of 2026, per TrendForce, and the balance of power has shifted with it. In September,
Quanta reportedly halted HP notebook production for about a week after price talks stalled, resuming only once senior HP executives agreed to a cost adjustment. Neither company has confirmed the account, and Quanta has said it does not comment on individual customers.

This indicates that brands are not simply courting cheaper labor; an ODM that earns most of its money from AI racks can afford to walk away from a laptop contract, and a pool of hungry Chinese assemblers is the obvious
counterweight that has sprung into action in what one can only describe as a 'needs must' situation.

The cost of the reversal lands on the suppliers that followed the brands south. One manager at a PC component supplier told Nikkei that the firm built two new production lines in Thailand for PC customers, only to watch substantial orders move back to China. "Those two lines have not yet turned profitable," the manager said, according to Tom's Hardware , adding that the firm has no idea when those orders will come back.

TrendForce estimates that the share of global notebook production outside China will fall from about 24% in 2025 to 21% in 2026, and could slip below 20% in 2027. Flipped around, that means China's share climbs from roughly 76% to 79%. In hindsight, China+1 never really dislodged China; what is being relocated back is a few points of share that the industry paid heavily to
move in the first place.

The reports do not say where the China-built machines are headed, and that part is crucial because the original exodus was about US tariffs: Asus's 90% figure quoted above referred specifically to US-bound production, and the CXMT-equipped notebooks were limited to non-US markets.

One could read this as brands splitting output by destination, keeping US-bound lines in Southeast Asia while pulling the rest back to China, but nothing confirms this so far, directly or indirectly. What we do have, however, is a market backdrop that explains the urgency in play: Global PC shipments fell 20.1% year over year to 62.7 million units in Q3 2026, according to IDC , with HP suffering the steepest decline among the top five vendors at 30.9%. Asus, by contrast, slipped just 8.6%.

The memory makers see no quick fix either; SK hynix said alongside record quarterly results last week that it expects demand to outstrip supply through 2030, and Intel finance chief David Zinsner told investors, "Make no mistake, we are not optimistic about next year in terms of memory."

Acer chairman and CEO Jason Chen expects average PC prices to rise by between 5% and 20% in the fourth quarter , so any efficiency gains look set to
protect margins rather than cut sticker prices in a market doomed to short-term volume decline. Chen remains an interesting outlier, however, insisting that, "It's impossible for the shortage to last until 2030!" and predicting prices will start to ease from mid-2027.

Until that happens, cost continues to matter more than diversification to avoid hemorrhaging global market share for many PC makers, and the cheapest place to build a laptop is once again the country the industry spent years trying to leave. Follow TechRadar on Google News and add us as a preferred source to get our expert news, reviews, and opinion in your feeds.



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Link to news story: https://www.techradar.com/pro/major-pc-makers-are-shifting-production-back-to- china-as-costs-rise-hp-asus-among-firms-moving-work-in-efficiency-push


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