BANGKOK – Google has announced shifting its Pixel smartphone production from China to Vietnam starting this year as it builds a cheap supply chain in Southeast Asia.
The move comes as labor costs are rising in China along with added pressure from spiraling tariffs due to the ongoing China-US trade tensions.
The US internet giant plans to move most of its American-bound hardware out of China, including the Pixel phones and its smart speaker Google Home, Nikkei reports.
Google also plans to ship about 8 million to 10 million smartphones this year, double from a year ago. Making Vietnam a key part of Google’s drive for growth in the smartphone market, the newspaper added.
Google will shift some production of the Pixel 3A phone to Vietnam before the end of this year.
For its smart speakers, some production is likely to be moved to Thailand. However the company’s new product development and initial production for its hardware lineup will still be in China.
Google did not immediately respond to a request for comment on the matter, outside regular business hours.
The Justice Department has signaled opposition because of concerns over its Chinese investor.
Google filed for permission to bring the cable to the U.S. in April 2017. It has since twice won special temporary authority for construction and testing from the FCC.
Source Reuters, Nikkei