Dell considers moving factories to central and western China
Dell will consider transferring its factories to central and western China if wages in coastal areas continue to rise. However, the company supports higher wages for workers in coastal areas, said Amit Midha, the president of Dell in Greater China and South Asia, on June 21.
Several electronic manufacturers including Foxconn have previously decided to move factories to inland regions. In 2009, Taiwan Hon Hai Group, the parent company of Foxconn, established a joint venture for producing laptop computers with Hewlett-Packard in Chongqing.
Taiwan Quanta Computer, another major laptop contract manufacturer, also established factories in Chongqing in early 2010. In addition, some enterprises in the industry chain of laptop manufacturing also settled in Chongqing. As a result, Chongqing has suddenly become an important production base of laptop computers worldwide.
Dell's factories in China are located in Xiamen and mainly supply the Chinese and Northeast Asian markets. In addition, Dell has also adopted a "no factory" strategy, which means selling their own factories around the world and switching to exclusively buying from contract manufacturers.
Midha said that there are three standards by which Dell chooses contract manufacturers. The first is cost control, the second is flexibility and the third is whether or not the production cycle of the agent factory can meet Dell's requirements.
