HP visits Taiwan with most high-level delegation ever

Aaron Lee, Taipei; Jack Wu, DIGITIMES Asia 0


Supply chain sources revealed that HP CEO Enrique Lores led a whirlwind visit to Taiwan this week.

Besides hosting an internal event at HP Taiwan, they also met with Taiwanese suppliers, including Quanta, Wistron, Inventec, and Foxconn. These events demonstrate the Taiwanese supply chain's importance to HP and express the company's full commitment to AI advancement.

In addition to Lores, other top HP executives who visited Taiwan include President of Personal Systems Alex Cho, Chief Supply Chain Officer Ernest Nicolas, President of Workforce Solutions Dave Shull, and Chief Marketing & Corporate Affairs Officer Antonio Lucio. The supply chain described this as the most high-level delegation HP ever sent to Taiwan.

Industry sources reported that Dell executives are also scheduled to visit Taiwan next week to meet with the supply chain. It's likely no coincidence that both major US brands met with ODMs before COMPUTEX. There are rumors that Microsoft and PC brands will jointly announce an updated version of its OS during COMPUTEX, adding fuel to the AI PC trend for the second half of 2024.

Supply chain sources pointed out that Quanta vice chairman C.C. Leung, Wistron president Jeff Lin, Inventec president Jack Tsai, and Foxconn chairman Young Liu were all guests at the HP event. A notable detail is that Compal was absent from the event, raising speculation.

Reportedly, Lores also met with TSMC and UMC during this visit to Taiwan, a clear move to secure suppliers. It's been revealed that HP's orders with TSMC have reached a single-digit percentage of TSMC's business. In the push toward AI, support from the downstream ODMs and upstream semiconductor manufacturers is crucial.

Production diversification

With so many top executives visiting Taiwan, HP is sending a clear signal of reliance on the Taiwanese supply chain. Amidst geopolitical tensions in the Taiwan Strait and brands promoting the "Taiwan+1" strategy, HP's visit to Taiwan is seen as a move that successfully stabilized morale.

However, supply chain sources also noted that whether it's HP, Dell, Apple, or other US brands, the "China+1" and "Taiwan+1" strategies will continue to advance. The US presidential election coming in November is another factor to consider, as it could exacerbate geopolitical fluctuations if Donald Trump makes his return to the White House.

Suppliers with factories in Vietnam and Thailand have noticed that clients have accelerated the pace of diversification, a departure from previous wait-and-see attitudes. Whether this is in preparation for the US presidential election remains uncertain. Sources also pointed out that HP executives inquired about similar projects during their Taiwan visit.

Currently, HP's notebook production is still primarily based in China, with some in Taiwan, but in recent years, Mexico, Thailand, and Vietnam have also been planned as manufacturing sites. Mexico and Thailand are progressing faster, with Mexico serviced by Inventec and Thailand mainly serviced by Quanta with Inventec also competing for orders.

HP's future: AI PCs

Lores' visit to Taiwan is also to host the HP internal event "Future Ready Ignite." Top executives took the stage at the event to outline that AI will be the main focus of HP's future and the hope is to dominate the AI PC sector.

In interviews, Lores repeatedly emphasized his excitement about the opportunities brought by AI. HP has already launched AI PCs and is collaborating with chip manufacturers to introduce even more new products.

Lores estimated that AI PCs will account for 40-60% of total sales three years after their introduction, expanding annually from 2024 onwards. Apart from hardware, software and applications must also be supported, and HP is actively cooperating with relevant partners. He expressed similar views during his visit to the supply chain in Taiwan.