Google Abandons China for Pixel Production

Google is reportedly set to leave China in 2027, moving its Pixel production from the country to Vietnam and India. This move would follow Samsung's lead, making it a significant shift for smartphone manufacturing. According to Counterpoint Research, this change will have different impacts on each market.

For China, losing flagship Pixel volume will be a relatively small dent in its supplier base. However, it is 'symbolically significant'. In contrast, India stands to benefit the most from US-bound volumes due to its lower tariff exposure compared to Vietnam. Vietnam, meanwhile, would solidify its position as a production hub for high-end devices.

Nikkei Asia reports that Google's decision to leave China will be easier than Apple's because Google doesn't officially sell phones in the country, and has been banned from doing so since the early 2000s. The Pixel user base is also relatively small, making it simpler for Google to move its production. Additionally, Google can leverage Samsung's established supply chain ecosystem in Vietnam.

Google has informed its suppliers that it plans to increase Pixel phone shipments by 8-10% this year, up from 12 million units last year. This growth is expected to drive the adoption of Google's AI products like Gemini.