US-China Chip Wars: Dell To Phase Out ‘Made In China’ Chips By 2024

The United States (US)–China semiconductor supply chain wars are taking a new turn every week.

Hit by sanctions from the Washington, DC, Beijing is now witnessing the departure of companies.

Earlier this week, multinational technology company Dell announced that it will stop using chips made in China by 2024, along with other components manufactured in the mainland.

In the last quarter of 2023, Dell announced that it will lower the number of Chinese chips it uses in its production, and, as per a report in Asia Nikkei, the company will also reduce imports from facilities in China with non-Chinese chipmakers.

By the end of 2024, all chip imports to Dell would be from outside China.

Not just Dell, even rival company HP is looking to do the same.

Beyond chips, Dell has asked suppliers of other components, which include electronic modules, print and circuit boards, and product assemblers, to prepare for production outside China, as per the same report.

Industry experts are attributing this sudden shift to the White House sanctions.

Not just companies, but many European nations are attracting investments from the likes of Taiwan Semiconductor Manufacturing Company (TSMC).

In December, it was reported that TSMC was in talks to set up its first European plant in Germany, to cater to the growing demand of the region’s automobile industry.

If the talks between TSMC and German authorities attain a fruitful conclusion, construction of the new plant could begin in 2024.

The Taiwanese company was in talks in early 2023 as well, but the invasion of Ukraine delayed discussions. However, TSMC, as of now, is not looking to build advanced microchips, but will focus on 22-nanometre (nm) and 28-nm technologies.

TSMC, along with Samsung and Intel, is looking to invest close to $380 billion over the next 10 years, to build new factories in Taiwan, South Korea, America, Japan, Germany, Ireland, and Israel.

In the US alone, an investment worth $200 billion was committed after the Chips and Science Act.

In October last year, the US Commerce Department announced a set of sweeping instructions, aimed at disrupting China’s manufacturing dominance in the supply chain sector.

The Biden administration announced that it would impose restrictions on 31 Chinese companies, effectively blocking their ability to obtain core US technologies.