Dell said to be planning purge of Chinese chips from products by 2024
(2023/01/05)
- Reference: 1672932612
- News link: https://www.theregister.co.uk/2023/01/05/dell/
- Source link:
Dell looks set to stop using chips from China in its products by 2024, according to reports. The move appears to be part of a wider effort to shift its supply chains away from the country in response to the ongoing tensions between China and the US.
The PC and tech infrastructure maker has told suppliers to significantly reduce the volume of components sourced from China in its products, including those made in the country by non-Chinese manufacturers, according to a report in [1]Nikkei Asia , which cites anonymous sources "with direct knowledge of the matter."
Those sources claim that Dell is aiming to eliminate all chips manufactured inside China from its products by the close of next year.
[2]
However, the Nikkei Asia report states Dell declined to comment in detail on its diversification plans.
[3]
[4]
We asked Dell if it could confirm these reports and that this is indeed a strategy the company is pursuing.
The company told The Register that it continuously explores its supply chain options in order to best meet customer and partner requirements. It added: "China is an important market where we have team members and customers to serve. We continuously explore supply chain diversification across the globe..."
[5]
The reported move could be seen as a direct result of growing concerns in the industry over Washington's policies regarding China and access to advanced computer technology, which it says it wants to keep out of the hands of the Chinese military.
The US government put in place [6]new export controls last year to halt the sale - without an export licence to China - of all chips that could be used for AI and HPC applications, as well as blocking the supply of any equipment that could be used to manufacture logic chips, DRAM or flash memory using advanced production nodes.
However the US sanctions have become a set of moving goalposts, as Washington keeps adding new restrictions and widening what is covered by them. In response, it's not surprising that companies may come to the view having any Chinese involvement in their supply chains as too risky.
China woos vendors
China hopes to turn Shenzhen into a hub for sourcing chips and other components, according to the [7]South China Morning Post . The Electronic Components and Integrated Circuits International Trading Centre has been set up in the city’s Qianhai economic zone with an initial capitalization of ¥2.1 billion ($305 million). It aims to engage companies involved in the electronics industry around the world, in an apparent effort to side-step US restrictions on selling advanced technology to China.
“To some extent, I’ve been surprised at the robustness of the US position,” Gartner vice president for semiconductors and electronics Richard Gordon told us. “They keep ratcheting up the restrictions and expanding their definition of what counts as cutting edge technology.”
Earlier this week, it emerged that HPE is [8]selling its remaining stake in its China-based joint venture H3C, despite saying it was pleased with growth in the Chinese market just a few months ago.
[9]
Republican lawmakers also [10]threatened Apple last year over reports that it planned to use flash memory components from China's YMTC in the iPhone 14, citing “security risks,” a development that won’t have been lost on other US technology companies.
[11]Last week's US export controls could mark start of trade war
[12]HPE to offload remaining stake in Chinese joint venture H3C
[13]Biden cuts off China's Yangtze, 30 others from US chipmaking gear
[14]South Korea relieved US China chip ban won't bite, as Beijing fumes
The Nikkei Asia report claims Dell isn’t stopping at chips manufactured in China, but wants suppliers to ensure that other components such as circuit boards are sourced elsewhere as well. It also claims that HP is another IT company contemplating a similar move.
Such a move would not only be radical, but it might also be tricky to pull off, given that there are thousands of components in products such as laptop computers, and China has become a key manufacturing source for many over the past couple of decades.
Dell also supplies a wide range of IT products, including PCs, servers, network switches and storage hardware, any of which is likely to contain multiple components sourced from China. ®
Get our [15]Tech Resources
[1] https://asia.nikkei.com/Spotlight/Supply-Chain/Dell-looks-to-phase-out-made-in-China-chips-by-2024
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Y7cCLkeMYkdF1bFqE45PQwAAANg&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
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[6] https://www.theregister.com/2022/10/10/new_us_export_controls_could/
[7] https://www.scmp.com/tech/big-tech/article/3205560/us-china-tech-war-shenzhen-set-become-international-sourcing-hub-semiconductors-electronics-new
[8] https://www.theregister.com/2023/01/03/hpe_to_sell_remaining_share/
[9] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Y7cCLkeMYkdF1bFqE45PQwAAANg&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[10] https://www.theregister.com/2022/09/12/apple_memory_china_ymtc/
[11] https://www.theregister.com/2022/10/10/new_us_export_controls_could/
[12] https://www.theregister.com/2023/01/03/hpe_to_sell_remaining_share/
[13] https://www.theregister.com/2022/10/07/biden_china_chips/
[14] https://www.theregister.com/2022/10/10/china_fumes_over_us_chip_ban/
[15] https://whitepapers.theregister.com/
The PC and tech infrastructure maker has told suppliers to significantly reduce the volume of components sourced from China in its products, including those made in the country by non-Chinese manufacturers, according to a report in [1]Nikkei Asia , which cites anonymous sources "with direct knowledge of the matter."
Those sources claim that Dell is aiming to eliminate all chips manufactured inside China from its products by the close of next year.
[2]
However, the Nikkei Asia report states Dell declined to comment in detail on its diversification plans.
[3]
[4]
We asked Dell if it could confirm these reports and that this is indeed a strategy the company is pursuing.
The company told The Register that it continuously explores its supply chain options in order to best meet customer and partner requirements. It added: "China is an important market where we have team members and customers to serve. We continuously explore supply chain diversification across the globe..."
[5]
The reported move could be seen as a direct result of growing concerns in the industry over Washington's policies regarding China and access to advanced computer technology, which it says it wants to keep out of the hands of the Chinese military.
The US government put in place [6]new export controls last year to halt the sale - without an export licence to China - of all chips that could be used for AI and HPC applications, as well as blocking the supply of any equipment that could be used to manufacture logic chips, DRAM or flash memory using advanced production nodes.
However the US sanctions have become a set of moving goalposts, as Washington keeps adding new restrictions and widening what is covered by them. In response, it's not surprising that companies may come to the view having any Chinese involvement in their supply chains as too risky.
China woos vendors
China hopes to turn Shenzhen into a hub for sourcing chips and other components, according to the [7]South China Morning Post . The Electronic Components and Integrated Circuits International Trading Centre has been set up in the city’s Qianhai economic zone with an initial capitalization of ¥2.1 billion ($305 million). It aims to engage companies involved in the electronics industry around the world, in an apparent effort to side-step US restrictions on selling advanced technology to China.
“To some extent, I’ve been surprised at the robustness of the US position,” Gartner vice president for semiconductors and electronics Richard Gordon told us. “They keep ratcheting up the restrictions and expanding their definition of what counts as cutting edge technology.”
Earlier this week, it emerged that HPE is [8]selling its remaining stake in its China-based joint venture H3C, despite saying it was pleased with growth in the Chinese market just a few months ago.
[9]
Republican lawmakers also [10]threatened Apple last year over reports that it planned to use flash memory components from China's YMTC in the iPhone 14, citing “security risks,” a development that won’t have been lost on other US technology companies.
[11]Last week's US export controls could mark start of trade war
[12]HPE to offload remaining stake in Chinese joint venture H3C
[13]Biden cuts off China's Yangtze, 30 others from US chipmaking gear
[14]South Korea relieved US China chip ban won't bite, as Beijing fumes
The Nikkei Asia report claims Dell isn’t stopping at chips manufactured in China, but wants suppliers to ensure that other components such as circuit boards are sourced elsewhere as well. It also claims that HP is another IT company contemplating a similar move.
Such a move would not only be radical, but it might also be tricky to pull off, given that there are thousands of components in products such as laptop computers, and China has become a key manufacturing source for many over the past couple of decades.
Dell also supplies a wide range of IT products, including PCs, servers, network switches and storage hardware, any of which is likely to contain multiple components sourced from China. ®
Get our [15]Tech Resources
[1] https://asia.nikkei.com/Spotlight/Supply-Chain/Dell-looks-to-phase-out-made-in-China-chips-by-2024
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Y7cCLkeMYkdF1bFqE45PQwAAANg&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
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[6] https://www.theregister.com/2022/10/10/new_us_export_controls_could/
[7] https://www.scmp.com/tech/big-tech/article/3205560/us-china-tech-war-shenzhen-set-become-international-sourcing-hub-semiconductors-electronics-new
[8] https://www.theregister.com/2023/01/03/hpe_to_sell_remaining_share/
[9] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Y7cCLkeMYkdF1bFqE45PQwAAANg&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[10] https://www.theregister.com/2022/09/12/apple_memory_china_ymtc/
[11] https://www.theregister.com/2022/10/10/new_us_export_controls_could/
[12] https://www.theregister.com/2023/01/03/hpe_to_sell_remaining_share/
[13] https://www.theregister.com/2022/10/07/biden_china_chips/
[14] https://www.theregister.com/2022/10/10/china_fumes_over_us_chip_ban/
[15] https://whitepapers.theregister.com/
Made in China.
TimMaher
The best chips are made in Belgium, as any fuwel know.
Anonymous Coward
Why wait until 2024? I never understood why you'd go to a Chinese and get takeaway chips instead of rice...
There are chips that weren't made in China?