According to Digitimes, the company has shifted back some of its component orders from China-based suppliers to Taiwan for the second half of 2016. The move is to improve its profitability, since China makers are getting even less competitive in terms of product quality, delivery time and production capacity.

Lenovo wanted a Chinese-based supply chain to save costs, but is starting to lose interest in the idea as costs increase.

The world on the streets is that pushing shipments is no longer a viable choice for increasing profits in the PC market. Lenovo might be the world’s largest PC vendor, but its profits are still weak despite its big shipment volumes.

Lenovo has been trying to claw back cash using ultra-thin and gaming PCs. But these need better crafting capability which the Chinese can’t manage for anything like a reasonable price.

Lenovo is planning to reduce its costs by $1.35 billion and axe its staff by 3,200 every year and the company is also looking to cut its R&D expenses.