Dell To Phase Out Use Of China-Made Chips By 2024: Report

Dell, the world’s largest server manufacturer would not confirm the report, but told CRN the company is constantly seeking to diversify the number of regions where it sources component parts.

Dell will reportedly stop using semiconductor chips made in China by 2024, over growing fears that political relations between the U.S. and China may worsen, according to three people who spoke with a Tokyo-based news outlet.

The company told suppliers that additionally, it wants to “meaningfully lower” the quantity of other Chinese-made component parts in its devices, according to the sources who spoke with Nikkei.

In a statement provided to CRN by a Dell spokesperson, the company called China an important market, but it did not dispute the reporting by Nikkei.

“To best meet our customers’ and partners’ needs and expectations, we have geographic diversity, flexibility and stability built into our global supply chain,” the statement read. “China is an important market where we have team members and customers to serve. We continuously explore supply chain diversification across the globe that makes sense for our customers and our business.”

The sources who spoke with Nikkei said Dell’s rival computer maker, HP, is also exploring ways to move its chip supply away from China. However, Dell, the sources said, has targeted the end of the year, by which time it hopes to have moved away from China-made chips.

“The goal is quite aggressive. The determined shift involves not only those chips that are currently made by Chinese chipmakers but also at the facilities in China of non-Chinese suppliers,” one person with direct knowledge of the matter told Nikkei. “If suppliers don‘t have responding measures, they could eventually lose orders from Dell.”

Dell partners last year praised the company’s secure supply chain as a massive differentiator when talking with prospective customers. Rick Gouin, chief technology officer of Dell Platinum Partner Winslow Technology Group told CRN at the time that his manufacturing customers are particularly concerned about where the parts they use are sourced.

“They’re having us take down all the different vendors in a supply chain, or having us figure out if different vendors are involved in a particular product. We’ve had manufacturers ask for all of that. Dell is able and willing to provide that information,” Gouin told CRN. “It’s a new function for us, but it’s a real differentiator. When I’m trying to bring these solutions to my customers, they want to know that I can answer those questions and that I’ve got the answer they want to hear.”