Some technology news sources have announced that Dell has decided to stop using Chinese-made chips in its products by 2024 due to concerns about tensions between the United States and China.
It is still unclear whether Dell will actually be able to use new chips to replace SMIC and Hua Hong chips in all of its products by next year, and we don’t know what effect this change will have on the company’s production costs.
Dell’s final plan is to stop using Chinese-made chips by 2024, but according to some reports, the company announced to its suppliers late last year that it plans to reduce the use of Chinese chips in its products. According to some sources, the third largest manufacturer of personal computers in the world wants to completely remove Chinese chips from all its products.
Dell’s decision to remove Chinese chips from the company’s products has several reasons. First, the mentioned company will apply more diversity in its supply chain. Another case is that US lawmakers stopped using devices equipped with Chinese chips in US government agencies in late 2021 due to national security concerns. The US government didn’t pursue the idea, but Dell certainly wants to make sure its products aren’t banned from being used by government agencies.
Chinese companies such as SMIC and Hua Hong produce relatively simple chips such as display driver ICs (DDICs), power management ICs (PMICs), and various microcontroller units (MCUs) for a variety of personal computers, monitors, keyboards, mice, and other peripherals. Meanwhile, companies such as Samsung and SK Hynix manufacture 3D NAND and DRAM chips in their Chinese facilities, and Micron has a testing and packaging facility in China. Dell did not confirm plans to replace Chinese-made chips in its products by 2024, but said it is continuously looking at diversifying its supply chain around the world.
In an interview with Nikkei Asia, one of the managers of the companies that produce the chips needed by Dell and HP said:
Replacing all Chinese chips for all Dell computers is definitely a difficult task because many of these parts are manufactured at third-party companies, and it’s not easy to know exactly what manufacturing process each chip uses.
Over the past few decades, all major US-based PC manufacturers have moved production to China, helping to create a complete supply chain in the country, but rising labor costs in China and rising tensions between the country and the United States have Companies like Dell have been thinking about diversifying their supply chain.
to report TomsHardwareApple also plans to produce some of its MacBooks in Vietnam this year, and many server manufacturers are moving their production lines to Taiwan. Even Foxconn, which is the world’s largest contract manufacturer of electronic products, has set up facilities in India and Vietnam some time ago, although this is not easy because there is not enough engineering talent available in Vietnam.
Now it remains to be seen whether diversifying the supply chain of PC manufacturers like Dell will affect the final price of their products or not.