By Key Points
- Microsoft to relocate Surface manufacturing starting 2026
- Data center servers and components may follow suit
- Shift comes amid rising US-China trade tensions
- Apple and other tech giants are also diversifying supply chains
Microsoft is making a bold move to rework its supply chain. The tech giant is preparing to shift its Microsoft Surface manufacturing out of China, with the transition expected to start in 2026, according to a report from Nikkei Asia.
This isn’t just about laptops and tablets. Microsoft is also preparing to relocate the production of data center servers, including the components and assembly processes behind them.
💻 Microsoft plans to manufacture most new products outside China starting in 2026. $MSFT is up 22.6% YTD. pic.twitter.com/0UpZhLq4do
— Quant Data (@QuantData) October 16, 2025
The company has already started moving some of its server manufacturing away from China, and sources say the effort is now expanding.
The timing isn’t random. Rising tensions between the US and China have created a volatile trade environment, especially for companies that depend heavily on Chinese production.
Former President Trump recently announced possible 100% tariffs on Chinese imports, along with fresh export controls on software. Add to that new port fees on both sides and China’s tighter rules on rare earth exports, and the supply chain landscape suddenly looks riskier than ever.
🇨🇳🇺🇸Microsoft Aims to Make Most New Products Outside China From 2026: Nikkei
Microsoft, Amazon Web Services (AWS), and Google are accelerating efforts to reduce their supply chain reliance on China amid rising U.S.-China tensions. Microsoft has instructed suppliers to prepare for… pic.twitter.com/chNaoQSwWx— CN Wire (@Sino_Market) October 16, 2025
For Microsoft, staying ahead of these geopolitical risks means rethinking where and how it builds its products. Microsoft Surface manufacturing has long relied on Chinese factories, but the winds are changing — fast.
Rebuilding the Supply Chain for Surface and Servers
The upcoming shift involves more than just a change of address. Microsoft reportedly plans to move the entire Microsoft Surface manufacturing ecosystem, which includes the sourcing of parts, components, and final assembly.
This change will also affect the company’s server division, which powers both Azure and enterprise data centers around the globe. According to sources, Microsoft has already moved some server production outside China and is now working to expand that effort further.
$MSFT, $GOOGL & $AMZN ARE ACCELERATING MANUFACTURING OUT OF CHINA
Microsoft wants 80% of Surface & server output outside the mainland by 2026 as AWS cuts Chinese suppliers & Google shifts to Thailand.
The AI supply chain is moving where control outweighs cost. pic.twitter.com/lhzifUcyTE
— Shay Boloor (@StockSavvyShay) October 16, 2025
What’s more, Microsoft is looking to shift Xbox console production to new regions too. This broader manufacturing transition is part of a strategy to reduce exposure to trade wars, supply chain disruptions, and increased production costs in China.
The new manufacturing locations haven’t been officially confirmed, but countries like Vietnam, India, and Mexico are strong candidates.
These regions offer lower labor costs, expanding industrial infrastructure, and trade incentives that appeal to large tech firms.
This isn’t just about cutting costs. Moving Microsoft Surface manufacturing to safer, more stable countries also offers resilience. In the face of unpredictable policy changes or trade restrictions, a diversified supply chain could be a game-changer for Microsoft’s long-term strategy.
日经亚洲：微软计划最早明年在中国以外生产其大部分新产品。知情人士透露，知情人士称，微软已要求多家供应商帮助准备从明年开始将Surface笔记本电脑和数据中心服务器的生产“移出中国”，包括关键部件和组装。
另有消息称，微软要求至少80%的服务器物料清单（BOM）来自中国境外。 pic.twitter.com/7Xy1h0P7Xs— 外汇交易员 (@myfxtrader) October 16, 2025
Meanwhile, Microsoft’s competitors are also adapting. For instance, Apple recently removed the IceBlock app from its store, which shows how tech companies are tightening controls amid a changing tech environment. Read more here.
Tech Giants Are Leaving China, Fast
Microsoft isn’t alone in this exodus. Apple is also accelerating its efforts to reduce dependence on China. A report from Bloomberg reveals that Apple is planning to manufacture a new smart home display, indoor security cameras, and even a tabletop robot, all in Vietnam.
This broader movement reflects a growing realization across the tech industry: relying too much on China is a risk. Between rising labor costs, government crackdowns, and external political pressure, China is becoming a less predictable partner in global manufacturing.
Other companies are also exploring new tech strategies to strengthen their positions. For example, Google’s AI Plus plan is redefining how tech companies think about long-term innovation and user engagement. Explore that here.
That’s why companies like Microsoft are acting now. By shifting Microsoft Surface manufacturing out of China, the company is not only sidestepping potential tariffs but also future-proofing its hardware business.
And it’s not just about Surface laptops. Microsoft’s server infrastructure, Xbox division, and even future AI hardware could all benefit from a diversified, global production network.
This trend isn’t isolated. Just recently, NBCUniversal inked a major deal with YouTube to expand digital distribution, showing how major players are doubling down on global strategy shifts. Get the details here.
Even newer platforms are evolving fast, like how ChatGPT now integrates apps inside its interface to improve productivity and workflows. Learn more about that here.
Tech hiring trends are also reacting to this shift. According to recent insights, Facebook job listings are reflecting a growing need for roles that focus on global operations and compliance. Check those out here.
With timelines pointing to 2026, we’re still in the early stages. But the direction is clear, Microsoft Surface manufacturing is moving to new territory. And that move could redefine how tech hardware is made for years to come.
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