Dell is also giving in, planning to shift some of its PC production back to China. The bold promises made years ago now appear as a hollow joke.
A report by Nikkei Asia on October 28 revealed that Dell’s management is currently evaluating the relocation of certain PC production lines from Southeast Asia back to China. As the world’s third-largest PC manufacturer—behind Lenovo and HP—Dell once led the charge in diversification, but now it is retreating with striking silence.
Three years ago, Dell announced ambitious targets: by 2025, 60% of notebooks supplied to the U.S. market must be produced outside China; by 2027, all PCs would be assembled entirely beyond Chinese soil. The Chengdu plant was dismantled; production capacity in Xiamen was cut by half; suppliers were pressured to relocate to Vietnam.
The outcome? Dell’s shipments in China plummeted by 44% in 2023, and by the second quarter of 2025, its market share had shrunk to less than 5%, officially categorized under “Others.” Globally, Lenovo’s market share reached 26.3% in the third quarter of 2026, while Dell stood at 13.3%—a gap that could not be clearer.
The real driver behind this reversal is not sentiment, but an explosion in component costs. DRAM memory prices have surged at least eightfold within a single year. The share of memory and solid-state drives in PC material costs has risen from a typical 15% to nearly 40%. A mainstream laptop, which cost $435 in early 2025, now requires $699 just for parts by the third quarter of 2026.
Assembly lines in Southeast Asia cannot sustain this pressure. While Vietnamese factories were built, secondary and tertiary suppliers failed to follow. Screws, heat sinks, and casings still need to be shipped from Kunshan and Shenzhen. Cross-border logistics costs have increased by 15% to 25%—absorbing any savings from lower labor wages, along with losses from power outages and production halts.
China offers more than low cost. It provides skilled labor, a fully integrated supply chain, and stable domestic sources of storage chips—all three elements combined in no other region globally. Luxshare Precision’s PC joint venture has secured orders from HP, Dell, and ASUS over the past year, driving rapid business growth.
The original “de-Chinese” timeline was overturned faster than anyone expected. When political considerations outweighed cost calculations, slogans rang loud and clear. But when cost realities reasserted themselves, political rhetoric had to yield. This is not a change of heart—it is a recalibration of numbers.
Do not rush to interpret Dell’s partial return as a sign of “victory.” The move involves only selective production resumption, not full-scale reversal. Risk diversification remains a core strategy, but the balance has temporarily shifted toward China. Supply chain logic is harder than any slogan. Those who treat manufacturing as a political instrument will eventually be taught a lesson by rising costs.
Source: Hong Kong Economic Daily, “AI Boom Drives Up Component Costs; HP, ASUS, and Acer Plan to Bring Production Back to China,” published October 29, 2026.
Original article: toutiao.com/article/1880376880360460/
Disclaimer: The views expressed in this article are solely those of the author.