Dell to expand operations in China

Dell plans to open a manufacturing site and customer support centers in China

Dell is opening new manufacturing facilities and customer support centers in China, it said Thursday.

The company plans to open a manufacturing and customer support facility in Chengdu next year, and to expand operations in Xiamen, said David Frink, a Dell spokesman.

The new Chengdu facility will become operational in 2011, and the staff count there could swell to 3,000 over time, Frink said. The company already operates an office and two computer manufacturing plants in Xiamen. It also runs a support center in Dalian and a product design center in Shanghai.

The new hirings in China will not affect the employee count in the U.S. or other countries, Frink said.

The new manufacturing facility will initially focus on laptops and then desktops, and then the company will look at other products.

Dell over the past few years began outsourcing PC manufacturing as it shut down many of its own manufacturing facilities to cut costs and streamline operations. The company has either closed or said it would shut down facilities and customer support centers in the U.S., Canada and Ireland. The company moved its manufacturing operations to countries such as India and Poland.

It has yet to be determined whether the Chengdu facility will be fully operated by Dell. "It may be a Dell facility, or in concert with an ODM [original design manufacturer]," Frink said.

At the same time, the company wants to retain some of its manufacturing capabilities as it tries to expand in growing markets like China and India.

"We see a great advantage in maintaining a flexible manufacturing model," Frink said.

Dell said that its overall spending in China could top US$100 billion over the next 10 years as it expands operations there.

Revenue outside the U.S. made up about 47 percent of the company's total $15.53 billion revenue during the second quarter of fiscal 2011, which ended on July 30. Revenue from the Asia-Pacific region was mainly driven by China, where revenue grew 52 percent year over year for the quarter.

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Agam Shah

IDG News Service
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