The growing tension between China and the United States is causing a stampede among big technology companies. Apple already made a move at the beginning of the year and now Microsoft and Amazon follow. They are not the first companies that They move from China to manufacture in other Asian countriesbut this migration is different as they are trying to eliminate China from the entire supply chain down to the smallest component level.
What is happening. They count in Nikkei Asia that Microsoft wants to manufacture most of its products outside of China and has set a limit of 2026. This movement would affect the production of Microsoft Surfaces and especially data centers, since it is a much more sensitive product. In fact, they have already managed to move a large part of the production of server components because it is a more sensitive product, but their goal is for at least 80% of the components to come from outside China. They also want to move some Xbox production out of China, although in this case they are not being as strict.
Why is it important. This move by Microsoft consolidates the trend of big technology companies moving towards independent supply chains from China. It is not a question of patriotism, it is an attempt to ensure their survival and minimize risks derived from the increasingly tense trade warsuch as interruptions in supply and price increases. Besides, in the middle of the AI raceindependence becomes even more necessary.
Something has changed. As we said, this is not the first time that technology companies have tried to become independent from China. The improvement in working conditions has made it not so cheap to produce there (although have found ways to retain manufacturing), so its status as the “factory of the world” has been lost in favor of other Southeast Asian countries. However, this time it is a broad movement that covers everything from assembly to materials and components such as PCBs, connectors, cables and fibers.
The challenge. Moving the assembly is the easy part, but moving the entire production to the last component is a huge challenge. The date that Microsoft has set does not seem very realistic, especially considering that we are talking about a large production volume. According to Omdiadistribute about 4 million Surfaces per year.
amazon. AWS is also moving towards ‘non-Chinese’ production for its AI data centers. They were considering reducing the presence of SYE, their printed circuit board supplier, but realized that it was not so easy to replace them. They are companies with which they have a relationship for decades and offer good prices, as well as quality and great production capacity.
Google. Those in Mountain View are also embarking on a similar path. According to Nikkei, they are asking their suppliers to expand server production in Thailand. At the end of 2024 we learned that They planned to invest 1 billion dollars and it seems to have paid off because they have managed to double their production capacity with four new facilities.
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