Dell, HP, Lenovo eye Saudi manufacturing Plants as US Tariffs Drive Shift

PC manufacturers are searching for ways to get around the high tariffs that have become a significant obstacle for their business as a result of the ongoing trade war between the US and China. In order to deal with this, a number of the largest companies in the PC sector, including Dell, HP, and Lenovo, are currently thinking about establishing new production facilities in Saudi Arabia.

These IT behemoths are now seeking other solutions due to the ever-increasing difficulty of keeping production costs within reason under exorbitant tariffs- some reaching up to 245%- on imported products from China. Lenovo took the earliest decision, announcing a planned PC and server manufacturing plant in Riyadh, Saudi Arabia's capital. This investment would be part of the Saudi government's and the private partnership to create a developing technological hub in Saudi Arabia, totaling $2 billion in investment in this facility.

The plant will manufacture goods targeted not only at the local market but also for the bigger Middle East and Africa markets. Lenovo intends to lessen its vulnerability to tariffs and enhance its competitive advantage in these markets by moving some of its production from China.

In the meantime, Dell and HP are still determining what to do next. Representatives from both businesses have traveled to Saudi Arabia to look at possible production sites and negotiate conditions with the government. While they haven't made any firm commitments yet, the combination of financial incentives and the ongoing trade conflict is making Saudi Arabia an increasingly attractive option for these companies. It is difficult to overlook the incentives that are available, including as government contracts and simpler access to North African markets.