According to a report from the Chinese newspaper Nikkei Google is moving many of its factories from China to other Asian countries such as Vietnam and Thailand, . While rising labor prices in China are also blamed for the company deciding to make the move, a large proportion of blame is attributed to the spiraling tariff costs associated with the ongoing China-U.S. trade war.
While Google will keep some of its factories within China, many of Google’s factories will be moved to other Asian countries — specifically, factories that create devices for the international market. According to the report, Google has already worked with a partner to begin moving its Pixel 3a factory to the Bac Ninh province of Vietnam, and plans to move many of the factories for its other devices. Manufacture of Google’s smart speaker range, the Google/Nest Home, are also reported to be moving out of China to Thailand.
The move comes at the same time as Google plots an aggressive push into the mobile market. While one of the biggest boys on the block where its Android software is concerned, Google’s own Pixel range struggles to match sales with the likes of Apple and Samsung. However, the release of the $400 Pixel 3a has started to change that, with Google reporting half-year sales of 4.1 million units that almost matched that of the entirety of 2018.
The small size of Google’s hardware manufacturing also worked to its advantage in this case. Due to its smaller size, it’s much easier for Google to quickly pack up and move factories in response to external pressures like the trade war or the Chinese economic situation. By comparison, Apple’s massive manufacturing base would likely find it a lot harder to move to another country. With Google aiming for 8 million to 10 million smartphone shipments this year, it must see the prospective locations as solid long-term factory locations. In fact, the aforementioned Vietnamese province of Bac Ninh was previously home to Samsung’s smartphone development, so Google may profit from finding an experienced workforce there.