Leading global tech company Dell is reportedly working to stop the use of China-produced computer chips. The U.S.-based company hopes to phase out all chips manufactured in China by 2024 when it intends to have completely switched production of chips to plants located outside China.
Dell plans to stop using all Chinese chips by 2024, Japan’s Nikkei newspaper reports. The computer maker has also reportedly told suppliers to cut down the amount of other made-in-China parts https://t.co/xFExM71Xy1 $DELL pic.twitter.com/gxZhrcPOti
— Reuters (@Reuters) January 5, 2023
Before then, measures have been put in place to “meaningfully lower” the amount of China-made chips used in its computers. The Nikkei reported on Thursday that a source revealed the company warned suppliers to use considerably less made-in-China components in its products.
The warning not only applies to Chinese chipmakers but also to non-Chinese suppliers with facilities in China. “If suppliers don’t have responding measures, they could eventually lose orders from Dell,” the source said, revealing that Dell’s shift is “quite aggressive.”
The computer giant is also reportedly looking to slash the use of other made-in-China parts used in its products.
Dell might not be the only tech company to be making this move as HP is reportedly taking a similar step and has started talking to suppliers about moving production away from China.
Dell’s move to phase out Chinese chips is one of its plans to shift its supply chains away from China amid the escalating trade tension between the Asian country and the United States. There have been growing concerns in the tech industry regarding China’s access to advanced computer technology.
Under the Biden administration, the U.S. wants to keep the Chinese military from such cutting-edge technology and has been coming up with different ways to slow down the country’s advancement in chips and artificial intelligence applications.
In October 2022, the Biden administration escalated the commercial conflict with a new set of export controls that included a measure to cut China off from the supply of certain chips made with U.S. tools anywhere in the world.
Washington doubled down on its plan to slow down Beijing’s technological and military advances with a December step that saw Chinese memory chipmaker YMTC and 35 prominent Chinese players in the artificial intelligence chip sector added to a trade blacklist.
This way, American suppliers are prohibited from exporting to the companies on the list without approval — which is expected to be denied in most cases.