Major tech companies are diversifying their supply chains to mitigate risks from uncertain Trump’s potential tariff hikes. While India has emerged as a new hotspot, Lenovo, HP, and Dell are considering Saudi Arabia for expansion, according to reports.
Lenovo has announced plans to build a PC and server assembly plant in Riyadh. Backed by USD 2 billion from a subsidiary of the Kingdom’s Public Investment Fund, the facility should be fully operational by 2026.
In March, Lenovo revealed plans to produce all PC models for the Indian market locally within three years.
HP and Dell Explore Saudi Arabia
HP and Dell have sent teams to Saudi Arabia to assess potential factory sites. This move indicates their interest in expanding operations into the region.
Saudi Arabia is also attracting major contract manufacturers (ODMs) like Foxconn, Quanta, Wistron, Compal, and Inventec. However, these ODMs remain hesitant, as successful expansion requires more than just labor and infrastructure. Strong client demand and reliable logistics networks are equally crucial.
Currently, Vietnam and Thailand serve as primary production hubs for ODMs outside China. Mexico hosts facilities that leverage USMCA benefits to bypass U.S. tariffs.
Saudi Arabia’s Strategic Advantages
Saudi Arabia offers significant incentives to global tech companies. A key advantage is preferential tariff treatment—products manufactured in Saudi Arabia face only 10% reciprocal tariffs when entering the U.S. Additionally, the Kingdom’s Public Investment Fund (PIF), with its USD 620 billion portfolio, offers substantial financial incentives to attract major manufacturers.
The Kingdom combines tariff benefits, state-backed funding, and long-term economic vision to position itself as a tech manufacturing leader.
