HP and Asus Move Laptop Production Back to China as Costs Bite

The China+1 strategy is quietly running in reverse

HP and Asus have begun shifting some PC manufacturing out of Thailand and Vietnam and back into China, according to Nikkei Asia, which cited unnamed industry sources. Acer is also rebalancing output, and Dell is reportedly evaluating a similar move.

The timing is awkward. Asus told investors in August 2025 that more than 90% of its US-bound motherboard and PC production had already moved to Thailand, Vietnam and Indonesia. HP had laid out plans as far back as 2023 to pull a large share of laptop production out of China. Both companies spent years and real money building that escape route.

What changed is the bill of materials. TrendForce puts processors, DRAM and SSDs at roughly 68% of a mainstream notebook's parts cost in the third quarter of 2026, up from about 45% in the first quarter of 2025. Omdia sees memory and storage climbing from around 15% of a PC's total price to about 40%.

When two-thirds of your cost sits in silicon you cannot negotiate down, assembly, logistics and engineering become the only line items left to attack. That is the whole logic of the reversal.

Why Chinese assemblers are winning the orders

The brands are not going back to their old partners. Quanta, Compal, Inventec and Foxconn have been steering capacity toward AI servers, where the margins are far better. Servers accounted for more than 80% of Quanta's revenue in the second quarter of 2026, per TrendForce.

That shift changes the balance of power. In September, Quanta reportedly halted HP notebook production for about a week after price talks stalled, resuming only once senior HP executives agreed to a cost adjustment. Neither company confirmed the account, and Quanta says it does not comment on individual customers. Still, an ODM that makes most of its money from AI racks can afford to walk away from a laptop contract.

Into that gap stepped Luxshare, Huaqin Technology and Longcheer. According to Nikkei, these firms are sending representatives to court the big brands with lower prices, waiving engineering and tooling fees to win orders, and pitching better access to Chinese-made memory.

That last point is not theoretical. HP, Asus and Acer qualified DRAM from China's CXMT around mid-2026 and have started shipping it in small volumes, in a handful of notebooks sold outside the United States. Counterpoint analyst Ivan Lam also told Nikkei that China retains an edge in peripheral and structural parts that other countries struggle to match.

The suppliers who moved south are paying for it

The reversal lands hardest on the component makers that followed the brands to Southeast Asia. One manager at a PC component supplier told Nikkei that his firm built two new production lines in Thailand for PC customers, only to watch substantial orders move back to China. "Those two lines have not yet turned profitable," the manager said, and the firm has no idea when those orders will return.

TrendForce expects the share of global notebook production outside China to fall from about 24% in 2025 to 21% in 2026, and possibly below 20% in 2027. China's share climbs from roughly 76% to 79% in the same period.

The reports do not say where the China-built machines are headed, and that detail matters. The original exodus was about US tariffs, and the CXMT-equipped notebooks were limited to non-US markets. Brands may end up splitting output by destination, keeping US-bound lines in Southeast Asia while cheaper China-built units serve everyone else.

One thing the shift will not do is make laptops cheaper. Relocating assembly does not lower the price of DRAM, and TrendForce sees no sign of falling PC prices as a result.

What it means for buyers in the US, UK and EU

For shoppers, the practical effect is on price and configuration, not on where the box was screwed together. Memory and storage now account for a far larger slice of a laptop's cost than they did 18 months ago, and that is the number to watch when comparing a 2026 model with its 2025 predecessor.

US buyers may see less of the China-built, CXMT-equipped stock, since those notebooks have so far been limited to non-US markets. European and UK buyers are more likely to encounter them. Neither HP nor Asus has announced specific models or pricing tied to the production shift.

The China+1 era was sold as supply-chain resilience. What it produced, at least for laptops, was a few points of share that the industry is now quietly handing back. The brands are not returning to China out of sentiment; they are returning because the people who build AI servers no longer need their notebook orders, and the people who do need them are in Shenzhen and Shanghai.