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Google drops China for Pixel phone production

(Image credit: Future)

Google is planning to move some of its hardware production out of China as it looks to avoid tariffs imposed by the Trump administration.

Currently, Google uses Chinese facilities for the manufacture of several devices, including its Pixel 3 smartphone and Google Home voice-activated assistant.

However with the US and China engaged in a trade dispute that has seen President Donald Trump impose tariffs on Chinese-made goods, the company is now reportedly set to move production to Vietnam.

Google China

According to Japanese publication Nikkei, Google has commenced the conversion of a former Nokia facility in northern Vietnam – the same region used by Samsung to develop a supply chain over the past decade. This will allow it to draw upon a pool of skilled workers to produce phones.

Nikkei says Google has plans to increase smartphone shipments to up to ten million by the end of the year – nearly double the figure last year. The new facility would give the company greater capacity to achieve that goal.

Google would not be the first major US tech firm to move production away from China. While tariffs have been a catalyst for the shift, there have also been concerns about rising labour costs.

Apple is reportedly looking to shift between 15 and 30 percent of its production to other countries, with India, Indonesia, Malaysia and Mexico among the candidates. However it would take several years to move even a portion of production away from China given the complex ecosystem that has been established there.

Google’s relatively smaller operation means it could move more production more rapidly.

Via Nikkei