HP eyes Thailand in plans to shift production from China

US-based IT giant Hewlett-Packard (HP) is looking to shift more than half of its PC (personal computer) production away from China to reduce potential geopolitical risks, Nikkei Asia reported on Wednesday.

HP also plans to set up a backup design hub in Singapore, the report said.

Nikkei Asia cited multiple sources as saying that HP is in talks with suppliers about the move and aims to achieve its target in two to three years. The company has set an internal goal of eventually making up to 70% of its notebooks outside of China.

A major destination for the move is Thailand, said the report, adding that at least five HP suppliers are building new manufacturing facilities or warehouse hubs in the kingdom, and two have been increasing capacity there since the beginning of the year at HP's request.

Nikkei Asia quoted an executive-level source as saying: “It is certain that HP is betting big on building a production hub in Thailand. We have other Southeast Asian facilities to support the client, but they said it is not efficient enough, so we are building a new factory in Thailand now, as requested."

Other sources said that in internal talks, several HP executives have been emphasising the emerging business opportunities in Southeast Asia and the Middle East while flagging the geopolitical risks of keeping production centered in China, due to years of US-China tensions as well as disruptions from Covid.