HP Sells Laser Printer Production in China to a Taiwanese Company

It is reported from China that HP has sold its laser-printer production to Foxconn, a Taiwanese company which also makes Apple products. It is reported that HP has announced that from the Q4 in 2022, Foxconn shall undertake the laser printer production of HP.

HP's laser printer plant is located at Welhai in China, a seaside city at the easternmost end of Shandong and is the nearest city to South Korea in China. HP’s contract with Foxconn to acquire the plant included the ongoing production of products for supply to HP.

According to Digitimes, “HP will continue to manage its Weihai production base and provide technical support for Foxconn, the sources said.”

RTM World cited BusinessKorea and said that the 20 or so smaller South Korean supply chain businesses, which were also previously supplying the Samsung operation, are shocked by the move. The production capacity had risen by 40 percent over the past three years. They now watch with interest to see how they may be affected by HP’s move out of China. Supply chains that have had dealings with HP in China are watching closely now that the OEM has sold its printing business to Foxconn.

RTM World reported that HP only picked up the Chinese operations as part of the deal done with Samsung having acquired its patents and operations four years ago in 2017. It further said that immediately after the news, the companies issued a joint statement and asked HP to maintain the current supply chain. However, HP just asked them to work well together with Foxconn.

Indian resellers think that this is a shrewd marketing strategy of HP to leave manufacturing to Foxconn and focus on branding, marketing etc.

"It's an attempt to remain competitive by leaving the manufacturing to those who can manage better and focus on branding, marketing and servicing. HP will remain relevant as Apple remains relevant by focusing on other important elements of design development, marketing etc. Not to forget, Foxconn manufactures for Apple too."

--Saket Kapur, MD, Green Vision, New Delhi

"Just a move to befool those who have banned import of Chinese products."

--Navin Gupta, MD, Computer Care, Jammu

It appears that HP wants to move out of China at least a part of its printer business. It's not clear what it plans to do with its inkjet printer production. Moreover, whether it wants to establish its printer production in another country is also not clear at this time.

Since laser printer is more in demand in India than the inkjet printer and a deteriorating link with China has affected the inflow of products from China, this move of HP may be a blessing in disguise for India, if the printers are going to be routed via Taiwan, or if HP establishes its printing production elsewhere. However, only time will tell how things turn out. But this is the time for other printing machine manufacturers to come into action.

For the reseller community, it is important now to watch how the printing business goes. Perhaps they can develop relationships with other printing machine manufacturers.