Why Tech Giants Are Shifting Manufacturing Out of China: Supply Chain Trends for 2026

Multiple multinational tech companies are moving their production chains out of China. According to Nikkei Asia (Oct 16), Microsoft plans to shift Surface device manufacturing, data‑center servers and component assembly abroad, aiming for full off‑shore production by 2026. Microsoft has asked suppliers to prepare for the transition.

Suppliers say the scope covers notebooks and servers, with at least 80% of server BOM materials to come from outside China. AWS is also adopting an overseas production strategy for its AI‑focused data‑center servers and considering reducing reliance on Chinese PCB supplier SYE, though replacing long‑term partners is challenging.

In Southeast Asia, the region is emerging as a new hub. Companies such as Victory Giant supply Nvidia PCBs from factories in Thailand and Vietnam. Google is expanding server capacity in Thailand, building four new facilities to double output, and creating an ecosystem where suppliers handle everything from components to assembly outside China.

Apple’s Tim Cook indicated that most products sold in the U.S. will be sourced from India and Vietnam, making Southeast Asia a key part of the global supply chain, though rising labor costs, infrastructure bottlenecks and talent shortages pose challenges.

A Japanese passive‑component maker notes that cloud service providers request non‑China options, but the low cost and variety of components make complete relocation difficult.