Microsoft clears the air over reports of shifting production from China

Lenovo said it has no plans to move production of its laptops out of China.

Microsoft denies shifting production out of China (AFP)

Microsoft has denied reports that it is going to shift production of its Xbox gaming consoles out of China.

According to a report in Nikkei Asian Review last week, tech giants like HP Inc, Dell, Microsoft and Amazon were considering to move 'substantial production capacity out of China' owing to the ongoing US-China trade war.

In a statement given to CNET, a Microsoft spokesperson said: "The reporting from Nikkei Asia Review was inaccurate and does not reflect Microsoft's manufacturing plans in China in any way."

Lenovo also reacted to the report, saying it too has no plans to move production of its laptops out of China.

According to the report, HP and Dell who make notebooks in the Chinese cities of Chongqing and Kunshan are looking to move up to 30 per cent of their laptop production out of the country. Amazon could also shift production of its Kindles and Echo speakers.

"Other PC makers like Lenovo Group, Acer and Asustek are also exploring production outside of China," said the report.

HP refused to comment on speculation.

The new US tariffs would hike local taxes on laptops, smartphones and game consoles, adding significant costs for the companies that would eventually be passed on to the consumers. Apple is already mulling the option to move up to 30 per cent of its smartphone production from China.

China is currently the world's biggest producer of PCs as well as smartphones. Foxconn Technology and Inventec have already moved some production out of China to other countries like Taiwan and Mexico, said the Nikkei report.

Amazon and Nintendo are reportedly exploring Vietnam as an alternative, while Microsoft was reportedly eyeing Thailand as well as Indonesia.