According to DIGITIMES, the NB supply chain reports that brand manufacturers are making a significant return, with “returning production to China” becoming a new trend. Brands such as HP, ASUS, and Acer have recently noticeably reduced their originally planned capacity shifts to Southeast Asia, with production focus returning to Chongqing or Kunshan in China, and increasing orders to Chinese ODM or EMS manufacturers and the proportion of private labeling. This involves production lines at Quanta, Inventec’s Thailand factories, and Compal, Wistron’s Vietnam factories, which may be affected by customer transfers. Lenovo, Dell, and Apple, on the other hand, remain relatively unchanged.

The supply chain indicates that after the U.S. equivalent tariffs were ruled unconstitutional by the Supreme Court, the impact of alternative tariffs is smaller, and the production costs for NB in Southeast Asia are on average $9 higher per unit than in China. The gross profit margin for brand manufacturers per unit of NB is mostly between 3% to 10%. Based on a low-priced model with an average price of about $300, the $9 difference is close to or even exceeds their profit, leading to unprofitable shipments. Local Chinese governments are also demanding increased output due to reduced tax revenue, or they will reclaim past subsidies, creating a pull for repatriation.

Relevant ODM personnel stated that they will respect customer decisions; if they cannot take on a single product, they will shift production locally to servers and other product lines such as networking. Lenovo is more cautious due to its diversified layout, with limited relocation; Dell has not made significant repatriation due to the high proportion of U.S. government orders; Apple targets the high-end market and promotes automation, with the main reason for moving MacBook production away from Shanghai being the pandemic-related supply chain disruptions, and its plans in Vietnam remain unchanged to date.