Google to Move Pixel Production Out of China by 2027, Expand Manufacturing in India: Report

Amid US-China tensions, US-based technology giant Google plans to stop making its Pixel smartphones, smartwatches and wireless earbuds in China from next year and pursue diversification of supply chains, a report has said. The report from Nikkei Asia -- citing sources -- said Google has been expanding manufacturing capacity in Vietnam and India in recent years and is confident it can move all Pixel manufacturing out of China by 2027. Google continues to operate a sizable share of its production from China, but the decision follows the successful development and production of its high-end Pixel smartphones in Vietnam this year.

Making advanced smartphones is more complex than production of smartwatches and wireless earbuds, it added. If the shift in production happens successfully, it would make Google the second major global smartphone brand after Samsung to fully shift smartphone production away from China. The report quoting a source said that the tech giant does not sell Pixel phones in the Chinese market, reducing the company’s reliance on domestic production there. Google is also planning to increase Pixel sales despite a sharp rise in memory chip prices and has informed suppliers to expect Pixel shipments to rise by 8-10 per cent this year from about 12 million units last year.

The company feels smartphones could bring more users to its Gemini artificial intelligence services and hence wants to maintain Pixel shipments growth despite higher component costs. Higher shipments could strengthen its negotiations with memory chip suppliers. It has merged orders for chips used in its cloud-computing business with smartphone orders while negotiating with Micron, Samsung and SK Hynix, the Nikkei Asia report said.

The news report quoted Google's component supplier executive saying the company was among the few smartphone makers that had not cut its shipment target for the year. If Apple raises iPhone prices, Google could gain more market share in the US, Japan and Europe, the executive added.

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