Google Moving Pixel Production Out of China Amid US-Beijing Tensions

Google is moving its production of Pixel smartphones, watches and wireless earbuds outside of China starting next year, reports Nikkei Asia. The development comes amidst ongoing Washington-Beijing tensions. The US tech giant has been aggressively expanding capacity in Vietnam and India to lower its dependency on China.

“The successful development and production of high-end Pixel phones in Vietnam this year … gave Google the confidence to proceed with the 2027 timeline for moving all Pixel production out of China,” the report says citing people with direct knowledge of the matter. “Compared with Apple, Google has no burden [to leave China] as it does not sell Pixel phones in the Chinese market,” said one of the sources as quoted in the report. “The progress in Vietnam is smooth, as Samsung has built a smartphone supply chain ecosystem there that Google could also access,” the source added.

‘Strategy for the Pixel phone this year is attack’

The report states that Google has told its suppliers to increase its Pixel smartphone shipments by 8% to 10% this year from last year's total of around 12 million units. This comes despite the skyrocketing cost of memory chips, as Google has high hopes that its smartphones will serve as an important portal for consumers to use its Gemini AI applications, the report says. "The strategy for the Pixel phone this year is: Attack. We are told Pixel phones need to keep their shipment growth momentum at all costs," the source told Nikkei Asia.

The tech giant has been combining memory chip orders for its cloud-computing business with smartphone chip orders in negotiations with memory makers such as Micron, Samsung and SK Hynix, according to a source. The move is aimed at giving Google greater bargaining power when buying memory chips. "Google's Pixel phone base is rather small, which gives it significant room to grow, and considering its massive cloud-computing business, even surging memory chips costs would not be too much of a burden," an executive with a Google and Xiaomi component supplier told the publication. "It could grab some share from Apple in the U.S., Japan and Europe when Apple raises prices for iPhones."