Google plans to shift all Pixel production out of China by 2027

Google is reportedly preparing to move the entire production of its Pixel smartphones, smartwatches and wireless earbuds out of China by 2027 as it diversifies its supply chain amid continuing tensions between Washington and Beijing.

The US technology company has expanded its manufacturing capacity in India and Vietnam over recent years and believes it can complete the transition next year, according to a Nikkei Asia report citing people familiar with the plans.

China continues to account for a sizeable portion of Google’s hardware production. However, the company’s successful development and manufacture of premium Pixel smartphones in Vietnam this year has reportedly strengthened its confidence in shifting the remaining operations.

Producing advanced smartphones involves greater technical complexity than manufacturing devices such as smartwatches and wireless earbuds. Successfully transferring Pixel smartphone production would therefore represent a significant step in Google’s supply-chain strategy.

If the move is completed, Google would become the second leading global smartphone company after Samsung to transfer all its handset production away from China, the report said.

Google does not sell Pixel smartphones in the Chinese market, limiting the commercial need to retain manufacturing operations in the country, according to a source cited in the report.

The company is also seeking to increase Pixel sales despite a sharp rise in memory-chip prices. It has reportedly advised suppliers to prepare for an 8–10 per cent increase in shipments this year from approximately 12 million units in the previous year.

Google sees its smartphones as an important means of attracting more users to its Gemini artificial intelligence services and is consequently maintaining its growth targets despite higher component costs.

A larger volume of Pixel shipments could also strengthen the company’s negotiating position with memory-chip manufacturers. Google has combined chip orders for its cloud-computing operations with those for smartphones during negotiations with suppliers including Micron, Samsung and SK Hynix, the report added.

An executive at one of Google’s component suppliers said the company was among the few smartphone manufacturers that had not reduced its shipment target for the year.

Google could also capture a larger share of key markets such as the US, Japan and Europe if Apple raises iPhone prices, the executive reportedly said.