DELL Plans to Phase Out Chinese Chips by 2024

DELL has decided to reduce its dependence on Chinese chips by 2024 due to uncertainties surrounding US-Chinese relationship.

Dell CFO Tom Sweet once said that there’s always going to be some issues affecting the consumer PC chain but added that from their perspective, it’s now operating more like the historical norm.

For more over 35 years, Dell has predominantly used Intel processors.
In its most recent quarter, Dell reported a 6% fall in consumer PC sales and cited a shortage of Intel chips as the cause. Sales of servers and networking systems fell 16% as a result of clients delaying capital expenditures owing to economic uncertainties.

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However, the server business is a different situation because of how challenging the ongoing semiconductor shortage is. Michael Dell, the CEO of Dell, stated during a speech at the Citi 2022 Global Technology Conference in New York that the company’s infrastructure difficulties are still ongoing. “I wish it was. We still have shortages in some of the trailing nodes, and certain types of silicon are harder to get and on longer lead times,”

According to Reuters.com, Dell has also asked suppliers of other components such as electronic modules and print circuit boards, and product assemblers to help prepare capacity in countries beyond China, like Vietnam, the report said.

This comes after the US added Chinese memory chipmaker YMTC and 21 “major” Chinese players in the artificial intelligence chip sector to a trade blacklist in December 2022.

This year, Intel invested substantial funds to ramp up 10nm production while boosting the manufacture of 14nm chips.

The US government is not pleased with how dependent the nation’s military and economy have grown on Asian high-tech manufacturing, and China is making significant investments in its own chip manufacturing capabilities.

The concept of “technology sovereignty” involves releasing financial restrictions on the government. Concerns over lagging behind China in yet another manufacturing sector contributed to the growth of support for the CHIPS Act.

Intel said that it will invest $20 billion in two semiconductor production facilities, or fabs, close to Columbus, Ohio. Eight Intel fabs with a total cost of $100 billion could potentially be housed at the new “megafab” facility.