Microsoft, AWS, Google seek to cut China’s role in supply chains

Microsoft, Amazon, and Google are accelerating efforts to shift production and data center manufacturing out of China amid rising US-China geopolitical tensions.

Microsoft aims to have up to 80% of components for its Surface devices and data centers manufactured outside China by 2026, asking partners to prepare for overseas production starting next year.

The company is also seeking to move some Xbox console manufacturing to other parts of Asia.

Amazon Web Services is reportedly considering reducing purchases of printed circuit boards for its AI data centers from long-time supplier SYE and has conducted an evaluation of what it could need to do.

Google is pushing suppliers to increase server production in Thailand, where it has secured multiple partners for parts and assembly.

🔗 Source: TechCrunch

🧠 Food for thought

Implications, context, and why it matters.

Shift timelines away from China look optimistic given original design manufacturer (ODM) limits

Microsoft wants 80% of components outside China by 2026. Quanta, a Taiwanese server ODM, invested $25 million in Thailand in August 2024 and Foxconn (a large contract manufacturer) runs a server hub in Vietnam 1.
PCB output in Thailand, Vietnam, and Malaysia was expected at $8.6 billion in 2024 2. China produced nearly 60% of servers in 2022 3, so matching that share within two years needs a scale-up rarely seen.
Vietnam faces power shortages and rationing risk despite launching Power Development Plan 8 (PDP8) in 2025 2. That could slow capacity plans of hyperscalers, very large cloud providers like Microsoft, Amazon and Google.

Server-grade PCB makers in Southeast Asia can win redirected demand

Microsoft, Amazon Web Services (AWS), and Google are moving server builds out of China. The High Density Interconnect (HDI) printed circuit board (PCB) market has a projected 8.3% compound annual growth rate (CAGR) through 2032, with data centers as an application 4.
Tech investors and systems integrators (firms that assemble then deploy hardware for clients) should map server-grade PCB fabs (fabrication plants) in Thailand, Malaysia, and Vietnam 2. Malaysia’s AT&S (an Austrian PCB manufacturer) has invested in advanced substrate production for AI servers, the base layer that connects chips to the board 2.
PCB makers from Taiwan, China, and Japan have entered Vietnam 2. That shift opens partnership options for electronics component distributors that seek supply for hyperscalers’ non-China server builds.