Google is working to move the production of its Pixel smartphones from China to Vietnam as the company seeks to avoid higher Chinese manufacturing costs as well as the looming concern of Trump-issued tariffs on Chinese goods that would raise prices on its phones, according to a report from Nikkei.

This isn’t Google’s first move out of China. The company was reportedly working to move Nest and server hardware production for devices bound for the US to Taiwan and Malaysia earlier this year, also to avoid rising tariffs due to the US / China trade war.

While the Nikkei report doesn’t specify which partner Google is working with to produce Pixel phones in Vietnam, Bloomberg’s Tim Culpan points out that it’s likely FIH Mobile, a Foxconn subsidiary that previously bought Nokia’s Vietnam factory from Microsoft. That lines up with the Nikkei report, which claims that Google is planning to convert an old Nokia plant for producing its own phones.

Google is said to be starting by shifting some of the Pixel 3A’s manufacturing to the Vietnam plant, with the goal of moving production there before the end of this year. New products are still expected to be built in China for now, which likely will include the forthcoming Pixel 4. Google isn’t the only company eying Vietnam for phone production: an earlier Nikkei report notes that Apple may be looking to shift between 15 to 30 percent of iPhone production to Vietnam and India to avoid tariffs, too.

By Chaim Gartenberg - The Verge - August 28, 2019