Report: Microsoft Moving Surface Production & Data Center Out of China by 2026

As trade tensions between the United States and China intensify, tech giants are rapidly pulling out of their Chinese manufacturing strategy. Following fresh tariff threats from President Trump, Microsoft is reportedly preparing to relocate production of its Surface devices and data center servers outside China.

According to an exclusive report by Nikkei Asia (via The Verge), Microsoft plans to begin the transition as early as 2026. The transition will reportedly cover not just product assembly but also key components and parts.

An anonymous source told the news outlet that Microsoft has asked that at least 80% of the bill of materials for servers, which includes parts, components, and assembly, come from outside China.

The unpredictability of U.S.-China trade relations and concerns over Beijing’s growing influence in the Taiwan Strait have further fueled the strategic change. To catch you up, Microsoft began shifting its server manufacturing last year, given the sensitivity of its enterprise and defense-related systems.

Sources say the company wants to limit its China-based supply chain to no more than 20 percent for these critical systems. The Surface line will reportedly follow a similar path, with production gradually expanding to other regions.