Alphabet Inc.'s Google LLC is moving its Pixel smartphone manufacturing to Vietnam from China starting this year amid rising labor costs in China and the ongoing trade war between the U.S. and China, the Nikkei Asian Review reported Aug. 28.
The U.S. search giant started working with a partner this summer to convert an old Nokia Corp. factory in the northern Vietnamese province of Bac Ninh to manage production of Pixel phones, two sources with knowledge of the company's plans said.
Google plans to double the production of smartphones from a year ago by shipping nearly 8 million to 10 million smartphones in 2019, sources said. Google shipped about 4.7 million smartphones in 2018.
Under current plans, Google will shift some production of the Pixel 3A phone to Vietnam from China before the end of this year, the people said. The company also intends to start manufacturing most of its American-bound hardware outside of China, according to the sources.
Some production of its smart speakers is expected to be moved to Thailand, the sources said, adding that the company's new product development and initial production for its hardware lineup will still be in China.
