Microsoft is gearing up for a substantial restructuring of its supply chain. Beginning in 2026, the tech giant aims to progressively shift the production processes of the majority of its new products, encompassing Surface laptops and servers. This shift will transition from full - scale assembly to the manufacturing of core components, with new production sites set in countries like Thailand and Vietnam.

This relocation initiative is a two - pronged affair. It not only entails the transfer of production lines but also necessitates a significant revamp of the bill of materials. For instance, it mandates that at least 80% of the materials used in server products should be sourced from outside China.

However, realizing a full - fledged component - level transfer by 2026 is no easy feat and presents a host of formidable challenges. The driving force behind Microsoft's strategic move is to hedge against geopolitical risks and adapt to the ongoing U.S. - China trade tensions.