Microsoft is working to shift its production lines out of China as trade tensions escalate between the country and the US, with the American company anticipating economic fallout.
According to a report from Nikkei Asia, the IT software giant spoke to many suppliers to get "out of China" production ready for its in-house 'Surface' laptops and data centres which involves vital parts and assembly.
"The scope is quite wide and covers components, parts and product assembly for new product introductions of both notebook computers and server products. Microsoft hopes all of these can be manufactured entirely outside of China starting from 2026 at the earliest," Nikkei quoted a company executive as saying.
The software giant ships out about 4 million Surface laptop computers and tablets per year, according to Omdia.
One of the execs also told Nikkei that Microsoft had moved a lot of its server production lines out of China since last year owing to their consideration of the sensitivity of their products. The firm reportedly had a mandate of 80% of the bill of materials for servers to come from outside of China.
The bill of materials covers parts, components and assembly processes. The company is also pushing to manufacture its Xbox videogame consoles outside of China.
"Moving assembly is rather easy, but [shifting production] down to the component level is radical and very challenging, especially with a timeframe like 2026, We need to see how this ambition will be carried out." another executive from the company was quoted as saying by Nikkei.
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