The American technology company Google has decided to suppress the production of smartphones Pixel in China. The group wants to transfer its activities to Vietnam, according to the Japanese business paper Nikkei. Google could thus bypass US taxes on Chinese products. In addition, the shift in production could also allow the group to realize savings on China's higher manufacturing costs.
This is not the only Google move out of China. The company is also looking to move Nest and production of server hardware for its US-based devices to Taiwan and Malaysia.
US import duties increase the cost of selling goods imported from China into the United States. This also applies to US companies that manufacture their products in China. By removing the production of pixels from China, Google can prevent the costs of its products increase.
The Nikkei did not give more details on the planned production in Vietnam. Google is said to have entered into an alliance with FIH Mobile, a subsidiary of Foxconn, which had previously acquired a former Nokia plant in Vietnam from Microsoft. According to the Nikkei report, Google plans to convert an old Nokia plant in Bac Ninh province in northern Vietnam to produce its own smart phones.
A first generation of the Pixel would be produced in Vietnam before the end of this year. The other models would follow later.
Google can also count on the expertise needed in the region. Ten years ago, Samsung built its smartphone supply chain in Bac Ninh, a province just 30 km east of the capital Hanoi and less than 80 km from the border with China.
The newspaper Nikkei added that the company intended to eventually transfer all production of its products for sale to the US market, including Pixel smartphones and the line of smart speakers Google Home, outside China to China. other neighboring countries, including Vietnam. and Thailand. Inventories not destined for the US market will continue to be produced in China.
Vietnam seems to benefit from the escalation of the trade dispute between the United States and China. In June, Nikkei had already announced that Apple planned to move between 15% and 30% of its iPhone production from China to Vietnam and India to avoid US tariffs.
The Japanese newspaper then announced that computer manufacturers HP Inc. and Dell Technologies also planned to cut up to 30 percent of their notebook production in China. Companies such as Microsoft, Nintendo, Sony and Amazon would have similar intentions.
Google wants to ship between 8 million and 10 million smartphones this year, double the previous year.