500% memory-price surge drives PC assembly back toward China

By Rebecca Stone

Memory prices have climbed an unprecedented 500% in 12 months, and HP, Asus and Acer have reportedly moved some PC manufacturing capacity back to China to blunt the component inflation that AI demand has unleashed.

That changed the arithmetic. Nikkei Asia, which reported the moves, said China’s experienced workforce, relatively lower prices and established supply-chain ecosystem now offer an edge over newer manufacturing hubs. The account did not specify plant names, capacity volumes or shipment schedules.

Which Chinese suppliers gain the work?

HP, Asus and Acer are not returning to Foxconn. The traditional assembler has devoted its production capacity to AI data centers. The brands are instead signing contracts with smaller Chinese manufacturers—Luxshare, Huaqin Technology and Longcheer Technology—that are trying to establish themselves in PC production.

Those contractors also often have better access to domestic memory chips from manufacturers such as CXMT, a factor that matters when conventional memory supply is tight.

A computer supply-chain manager told Nikkei Asia: “These Chinese contract manufacturers have been telling potential clients and computer makers that working with them could be a good option for securing better access to Chinese-made memory chips.”

The manager added: “They are marketing themselves as a good alternative to even help sort out the supply chain.”

Why is capacity returning to China?

Many PC brands slowly moved out of China during 2024 and 2025 as U.S. sanctions and tariffs raised prices and pushed production toward friendlier countries. Those countries have yet to match China’s established supply chains and expertise, although the dispersal reduced exposure to geopolitical tension.

The return reverses none of that diversification. Nikkei Asia reported that PC companies still support “China+1,” while China’s mature supplier base helps offset higher component costs. The immediate culprit is the AI-induced shortage in memory and storage chips, which has driven the 12-month, 500% memory-price increase.

Price pressure extends beyond memory. PCBs and fiberglass cloth used in motherboard manufacturing are also becoming more expensive. Acer chairperson and CEO Jason Chen said suppliers were hyping shortage fears to protect their margins.

What happens to Southeast Asia’s new lines?

Returning some assembly to China eases cost concerns but hurts the new supply chains built in Southeast Asia.

One manager at a PC component supplier told Nikkei Asia: “We built two new production lines in Thailand for the PC clients, and now they are moving substantial orders back to China. Those two lines have not yet turned profitable, and I don't know when they will add the orders back.”

Building an entire PC supply chain is slow and expensive, and the United States has pursued that goal for years. Anduril is the only company the report identifies as having tried to build laptops with 90% of component costs sourced from the United States and allied countries. It expects those devices to cost around 20% more than competing products.

Anduril can absorb that premium because it expects to sell mostly to critical industries, including government and military customers that value supply-chain security. Consumer PC makers lack that luxury: competing on price pushes them toward the lowest possible production costs, making China’s established manufacturing network commercially attractive again.

Forward pressure now rests on component prices. If memory, PCB and fiberglass-cloth costs do not ease, China’s mature supplier base and smaller contractors’ access to CXMT memory should favor further selective shifts of PC capacity back to China. Thailand’s two unprofitable lines meanwhile wait for orders with no announced timetable.