Microsoft, Amazon, and Google are accelerating efforts to move production and data center operations out of China amid rising geopolitical tensions between the U.S. and China. The tech giants are aiming to reduce their reliance on Chinese manufacturing for key components, assembly, and server production, according to supply chain sources.
Microsoft plans to have up to 80 percent of the components for its Surface notebooks, tablets, and data centers produced outside China by 2026. The company is reportedly asking partners to establish manufacturing capabilities abroad starting next year and is exploring moving some Xbox production to other parts of Asia.
Amazon Web Services is evaluating options to purchase fewer printed circuit boards from its long-time Chinese supplier and is assessing alternatives for its AI data centers. Google is pushing suppliers to expand server production in Thailand, where it has already secured multiple partners for components, parts, and assembly.
Despite these efforts, relocating production rapidly presents significant challenges due to the complexity of the China’s supply chains and the technical expertise of Chinese partners. Components and assembly processes for devices, servers, and gaming consoles involve a wide range of materials and highly specialised manufacturing capabilities.
This shift comes amid a series of retaliatory measures from both countries, including tariffs, tightened export controls on critical components, and restrictions on technology sales. These moves are part of a broader trend among global tech companies seeking to diversify their supply chains and mitigate risks from geopolitical tensions.
Microsoft, Google, and Amazon did not immediately comment on the reports.
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