Thanks to the U.S China Trade war and the rising cost of labor in China, Google is moving production of Pixel smartphones to Vietnam. A report from Nikkei claims that Google has already begun working on converting an old Nokia factory to start producing Pixel smartphones in Vietnam. One of the sources said, “this is the same province where Samsung developed its smartphone supply chain a decade ago.”

It is quite likely that Google will be able to hire an experienced workforce and meet its shipping target of 10 million smartphones this year. Google has been witnessing an increased demand for its Pixel phones especially after launching affordable options like the Pixel 3a. Talking numbers, Pixel sales blew right through the roof and registered a whopping 88% year-on-year increase. That being said Google Pixel is yet to make it to the major league when it comes to sales numbers.

By moving production to Vietnam, Google aims at diversifying Pixel production whilst keeping the production cost low. The U.S is the biggest market for Pixel and accounts for nearly 70% of the sales. Other countries like U.K and Japan also show strong demand for Pixel phones. Furthermore, the report cites that Google will move Pixel 3a production from China to Vietnam before the end of this year. Thats not all, the company is also expected to move smart speaker production from China to Thailand.

Our Take

The escalating trade wars are forcing tech giants to move out of China and diversify production. Companies like HP and Dell have shifted their servers out of China in a bid to avoid tariffs. Meanwhile, Apple is also looking out to set up manufacturing facilities in other Asian countries like India and Taiwan.