Google to shift Pixel smartphone production from China to Vietnam

Internet giant aims to double shipments in 2019 in aggressive hardware campaign

Google’s smartphone business is still small enough to shift away from China with relative ease, analysts say.

TAIPEI– Google is moving aggressively to shift production of its Pixel smartphone from China to Vietnam as it seeks to build a low-cost supply chain in Southeast Asia that will serve as a springboard for its growing hardware ambitions.

Working with a partner, Google started work this summer to convert an old Nokia factory in the northern Vietnamese province of Bac Ninh to handle production of Pixel phones, two people familiar with the company’s plans said. This is the same province where Samsung developed its smartphone supply chain a decade ago, so Google will have access to an experienced workforce.

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.

The Vietnam production lines will be a key part of Google’s drive for growth in the smartphone market. Google aims to ship some 8 million to 10 million smartphones this year, double from a year ago, sources told the Nikkei Asian Review. While Google’s Pixel smartphone brand is still a minor player in the industry — not even ranking in the global top 10, according to tech research firm Counterpoint — it is growing rapidly.

Source: Nikkei Asian Review

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