Google and Microsoft have reportedly shifted production from China to Vietnam. The search giant has shifted production to build ‘Made in Vietnam’ Pixel smartphones. The decision reportedly came due to worsening novel Coronavirus outbreak. Google Pixel 4a, likely to be the next low-cost device, is set to begin production as soon as April. The production of this device is said to begin at a facility in northern Vietnam. According to Nikkei Asian Review, Thailand might become another beneficiary of this change in production.
The report notes that Google is also planning to start making its flagship – Pixel 5 series – in Vietnam. The production is set to begin in the second half of 2020, according to two people with direct knowledge. Google has also reportedly asked a long-time manufacturing partner to help ready production lines in Thailand. This new production line is said to be for “smart home” related products. Google will build products like the Nest Mini smart speakers, cameras and IoT devices. The first products from Thailand are expected to start shipping in the first half of 2020.
Google and Microsoft move production to Vietnam
Google has been moving production away from China for sometime now. It already builds affordable Pixel lineup in Vietnam and it seems to be shifting base completely now. The company is the second largest smart speaker brand and Pixel shipments have seen 50 percent growth. Google is not the only one shifting the manufacturing base. Microsoft is also said to be moving production to Vietnam. The Redmond-based company is scheduled to start producing its Surface line in northern Vietnam in the second quarter of this year.
This will include notebook and desktop computers. “The volume in Vietnam would be small at the beginning, but the output will pick up and this is the direction that Microsoft wants,” a supply chain executive told Nikkei. Both Google and Microsoft first started shifting their production due to the US-China trade war. Now, with Coronavirus disrupting supply, these companies are further moving their productions. “The unexpected coronavirus hit will definitely push electronics builders to further seek production capacity outside their most cost-effective production base of China,” a supply chain executive said.
Google started to move production out of China last year. The company asked one of its partners to convert an old Nokia factory in Bac Ninh, Vietnam to handle the production of Pixel phones. The search giant has also reportedly approved another factory in Vinh Phuc. It has also reportedly moved production of data center server production to Taiwan last year. Apple has also started slowly moving production to India. We could see other companies follow suit in the coming months if Coronavirus affects them in a big way.