The push to develop a Vietnamese production base reflects the twin pressures of higher Chinese labor costs and the spiraling tariffs resulting from the trade war between Washington and Beijing. The U.S. internet giant intends to eventually move production of most of its American-bound hardware outside of China, including Pixel phones and its popular smart speaker, Google Home, according to the sources.
Report: Google to move its Pixel production out of China
If Google transitions their production out of China, then they'll avoid any current or future Tariff issues. Their current smartphone production levels are low enough where it makes sense to make the move now, if the Nikkei report actually pans out.
Google is looking to move some Pixel phone production out of China and into India, The Information reports. The company is seeking bids from contract manufacturers for production in India. Apple has already stepped up its efforts to make more of its iPhones in India as geopolitical tensions between the US and China rise. Sachin Bansal's Navi Technologies gets its IPO go-ahead. And Peer Robotics, a Delhi startup, raises $2.3 milllion
Google is reportedly planning to move about 10-20% of its Pixel smartphone production to India. Over the past few years, Google has produced smartphones in China and Vietnam, but now the company is eyeing India.
Even then, Google's production of Pixel devices has largely been dependent on China, just like iPhone. In 2019, Google first attempted to move from China, with the goal to produce Pixel smartphones in Vietnam where the Pixel 4A and Pixel 5 were reportedly produced.
While it appears that Google is keen on moving production to India, no deal has been reached yet. Companies like Apple and Google are probably affected by China's extreme Covid-19 lockdowns, the kind that are no longer being enforced anywhere in the world anymore. Owing to these lockdowns, Google has "faced delays obtaining components for some of its devices," a person with knowledge of Google's move said.
According to The Information, Google wants to move some of its most important consumer electronics production outside China amid consecutive Covid-19 lockdowns that have disrupted manufacturing and supply chains in the country.
Google is reportedly planning to move the production of the upcoming Pixel series out of China. It is believed that the Pixel 7 series will be made in Vietnam. In the past, Google has manufactured the A-series mid-range lineup in Vietnam, including the Pixel 4a, Pixel 5a, and Pixel 6a. The report further adds that Google might not be able to completely move out of China. The company is believed to be exploring the idea of developing a foldable smartphone in 2023, which is expected to require close connections with suppliers in China.
In fact, research firm Gartner revealed that a third of supply chain leaders had plans to move at least some of their manufacturing out of China by 2023. COVID-related sales slumps and supply chain disruption, as well as rising production costs, have hastened the exodus. Read on to discover which world-famous firms are partially or completely pulling out of the People's Republic. All dollar amounts in US dollars.
As relations between the US and China worsened and the trade conflict intensified, Dell quietly moved production and supply chains away from the People's Republic. In fact, the Nikkei Asian Review reported in 2019 that the Texas-headquartered tech company was planning to shift up to 30% of its notebook production out of China.
That same Nikkei Asian Review report cited anonymous sources stating that Dell competitor HP was also planning to relocate 30% of its notebook production away from China. The reasoning behind both moves was to avoid the punishing US tariffs on tech products produced in the People's Republic for the US market. In 2021, it was also reported that HP has sold its Chinese laser printer production to Taiwanese company Foxconn.
American firm Hasbro moved a significant proportion of its production out of China to factories in Vietnam and India. Amid the ongoing US-China trade war, the world's number-one publicly listed toymaker expected to produce around half of goods destined for the American market in China by the end of 2020, down from just under two-thirds in 2019.
Google is more or less blocked in China, but the search engine's parent company Alphabet still produces hardware products in the country, although perhaps not for much longer. As supply chains have become disrupted, the tech behemoth has moved manufacturing of its flagship Pixel smartphone to Vietnam and will reportedly produce various smart home products in Thailand rather than the People's Republic, while production of its Cloud motherboards and Nest products has relocated to Taiwan and Malaysia.
Sony closed its smartphone plant in Beijing in 2019 and moved production to a factory near Bangkok, Thailand. However, the Japanese tech company was at pains to stress that the move was prompted by disappointing sales and rising costs in China rather than the US-China trade conflict. Sony also opted to move its regional executives from Hong Kong to Singapore in July 2020.
In 2019, Nintendo moved some production of its Switch console from China to Vietnam. Like Sony, however, the Japanese video games company said the move has nothing to do with the US-China trade war and was more about diversifying its manufacturing options and avoiding putting all its eggs in one basket.
Steve Madden shoes and handbags will no longer be produced in China. The New York-based fashion company was hit by Trump administration-imposed tariffs and plans to gradually move production of its footwear and accessories to Cambodia, Brazil, Mexico and Vietnam in order to keep costs for its US customers on an even keel. After suspending the process because of the pandemic, Steve Madden began shifting production away from China in 2021.
Taiwan's Quanta Computer is the world's third-biggest electronics manufacturing services company and a major supplier of data centre servers to US tech firms such as Google and Facebook. The company opted to pivot production away from China and moved some of its manufacturing from the country to a new $500 million (383m) plant in the Taiwanese municipality of Taoyuan in 2019.
Google will shift bases for the production of its upcoming flagship smartphone. The company is reportedly shifting the production site of some of its Pixel phones to Vietnam. A New York Times report stated that Google plans to shift the assembly part from Foxconn facilities in South China to Vietnam. The first Google smartphone to get assembled in Vietnam following the move will be the upcoming Pixel 7 series. 2ff7e9595c
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