Google Shifts Pixel Production Out of China Amid Rising Tensions

Google plans to relocate all production of its Pixel products from China by 2027 amid growing tensions between Washington and Beijing. The company has informed its suppliers that it will manufacture all Pixel smartphones, watches, and wireless earbuds outside China starting next year.

The move is part of Google's strategy to reduce its dependence on China, despite a significant share of its production still being located there. The company has been progressively expanding capacity in Vietnam and India to support this shift. Its success in making premium Pixel phones in Vietnam has reinforced the decision to move all Pixel production out of China by 2027.

Google's limited presence in the Chinese market makes it easier for the company to shift production compared to Apple, which still targets shipment growth amid the global chip crunch. The rising cost of components, particularly memory chips, has been a significant pressure point for smartphone manufacturers, leading to increased handset prices in major markets like the U.S. and China.

However, Google expects Pixel smartphone shipments to rise 8% to 10% this year from roughly 12 million units last year, despite soaring memory chip prices. To strengthen its negotiating position with Micron Technology Inc., Samsung, and SK Hynix, the company is bundling memory chip orders for its cloud computing operations with those for its smartphones.