HP, Asus, and Acer reportedly are moving some manufacturing capacity back into China due to increasing bill-of-materials costs driven by artificial intelligence components. Nikkei Asia reported that the experienced workforce, relatively lower prices, and established supply chain ecosystem in China are making it an attractive option, despite previous moves by PC brands out of the country due to U.S. sanctions and tariffs. These companies are reportedly signing contracts with smaller Chinese contract manufacturers, including Luxshare, Huaqin Technology, and Longcheer Technology, rather than returning to traditional suppliers like Foxconn, which have focused on AI data centers.
The primary cost driver cited is the AI-induced memory and storage chip shortage, which caused memory prices to climb an unprecedented 500% in 12 months. Furthermore, prices for components like PCBs and fiberglass cloth are rising, leading Acer chairperson and CEO Jason Chen to bemoan suppliers hyping shortage fears to protect margins. While the industry is pursuing a "China+1" diversification strategy, the mature Chinese market is helping offset these increased component costs.
A supply chain manager in the computer ecosystem told Nikkei Asia that Chinese contract manufacturers are marketing themselves as a good alternative for securing better access to Chinese-made memory chips. However, this shift is negatively impacting newly established supply chains in Southeast Asia; one PC component supplier noted that two new production lines built in Thailand are seeing substantial orders moved back to China, and those lines have not yet turned profitable. The shortage extends to circuit boards, as high-end AI server boards require far more material and factory time than standard desktop motherboards.
One Taiwanese PC maker told Nikkei that laminate now costs at least 12 times what it did in July, and lead times on certain products have reportedly doubled, with some orders not expected until late 2028. Canon, a camera and medical equipment maker, stated that AI-driven shortages of boards and mounted parts have held up production since August, leading the company to expect a loss of about ¥90 billion in medical equipment sales this year. Gartner suggests that sub-$500 PCs could disappear by 2028 due to sustained high memory and storage prices.
