During the span of this week the news was released that Google, the American internet giant, plans to relocate the production of most of its equipment, including Pixel phones and your Google Home smart speaker, from China to the old Nokia factory in Vietnam.
With that Google reveals with this movement that this would be a strategy to establish a low-cost supply chain in Southeast Asia, especially given the current trade tensions in China, as as many will know in the United States, labor costs are increasing in China and tariffs are skyrocketing due to the trade war that these two nations currently have.
According to journalistic sources, this factory, to which the production of Pixel smartphones will be transferred, It is located in Bac Ninh province in northern Vietnam.
This is the same province where Samsung developed its smartphone supply chain 10 years ago, which would mean that Google will have access to an experienced workforce.
The company is also reportedly planning to export 8-10 million smartphones this year, double last year, making Vietnam a key part of Google's growth in the smartphone market.
This new drive to develop a Vietnamese production base by Google reflects the pressures that many companies are experiencing from higher Chinese labor costs and spiraling tariffs resulting from the trade war between Washington and Beijing.
Well, before this, Google has no choice but to look for alternatives to transfer the production of most of its hardware to the United States outside of China, since an example that is already alive was that of the Huawei case where one of its largest customers is still on the tightrope of this trade war.
With this situation, Google wants to avoid being another victim at all costs and preferred to seek the relocation of production of its products including Pixel phones and its popular smart speaker, Google Home, according to sources.
Google appears to be lagging behind in this momentum. HP and Dell also relocated their server production outside of China to avoid the punitive tariffs imposed by Washington, while transferring some of the laptop production to Taiwan and other Southeast Asian countries such as Vietnam, Thailand and the Philippines.
As for Apple, the company also plans to separate from China, but this is very difficult to achieve since more than 90% of its equipment is manufactured in the country.
Moment Google is known to transfer part of the Pixel 3A phone production to Vietnam before the end of this year.
Some of the smart speaker production is likely to be transferred to Thailand, but new product development and initial production of the company's hardware range will continue in China.
This move by Google leaves many concerned because they leave thinking about the possibility that the company with this move to Vietnam will lead to a decrease in quality control on products in order to lower costs more.
By diversifying its production in Vietnam, Google hopes to ensure sustainable production of the Pixel range.
In addition, Google's aggressive hardware campaign is expected to put pressure on second-tier mobile device makers like LG Electronics and Sony, who are struggling as the industry faces its third consecutive year of decline.
This is not Google's first move outside of China. It appears the company was working to move Nest and US-based device server hardware production to Taiwan and Malaysia earlier this year, also to avoid price increases due to the US trade war. and China.