- Lenovo plans to start production in Saudi Arabia by 2026
- The biggest benefit is 10% vs. 245% reciprocal tax
- US PC market is 27% of global market
Major PC makers like Lenovo, HP and Dell are reportedly exploring building new manufacturing plants in Saudi Arabia in order to avoid high US tariffs on Chinese-made goods.
A new report by DigiTimes (via Tom’s Hardware) said Lenovo looks to be the furthest alone, having announced a PC and server assembly plant in Riyadh in January this year, backed by a $2 billion investment from a Saudi Public Investment Fund subsidiary.
With production set to start by 2026, the Hong Kong-based OEM’s plans would see it open a new Middle East and Africa (MEA) headquarters in Saudi Arabia, “[enhancing] its global presence.”
Using Saudi Arabia to avoid Chinese tariffs
DigiTimes says HP and Dell have also sent teams to Saudi Arabia to scout out potential factory sites following local government invitations.
The biggest attraction for manufacturers to relocate to Saudi Arabia are the 10% reciprocal tariffs, compared with 245% for China.
Having a base in Riyadh would also enable the likes of Lenovo, HP and Dell to have better access to the MEA markets – a factor acknowledged by Lenovo.
In 2024, Lenovo shipped 11,872 desktops and notebooks to the US, making it the third-biggest in terms of volume with a 17.2% market share, behind Dell (22.8%) and HP (25.3%).
With 69,210 PCs sold across the US last year, the country accounted for 27% of all global PC shipments, highlighting the nation’s buying power.
Lenovo, HP and Dell aren’t the only companies looking to get out of China to reduce costs. TSMC and Apple recently announced their own manufacturing investments within the US, spanning production, R&D, training and more.
However, the PC market’s immediate future remains uncertain. “In addition to the direct impact of tariffs, the stop-start nature of announcements and delays have cast uncertainty around pricing for consumer electronics this year,” Canalys Analyst Greg Davis explained.
