With China proving to become less of an ideal place for the production of consumer electronics, American tech companies and other foreign brands have been eyeing other countries to shift production to. This is where countries such as India, Mexico, and Vietnam come in, and as tech giants are trying to diversify their production away from China, these countries are evolving into greater suppliers for foreign brands.
Now, Alphabet’s Google is walking down this path as it is mulling over shifting the assembly of some of its smartphones from China to India. Wayne Ma from The Information writes that the Mountain View-headquartered powerhouse is currently soliciting bids from manufacturers in India to assemble about 5,00,000 to 1 million of the company’s Pixel devices, its flagship smartphones.
This would account for about 10-20% of the estimated total annual production for the device. Google has produced the device entirely in China in recent years.
If Google decides to follow through and redirects the manufacturing of its Pixel phones to India, then it will be emulating Apple. The iPhone maker produces several models of iPhones in India and had earlier stated its intentions to move the bulk of the production of the iPhone 14 devices to the South-Asian country.
In a more recent development, the company announced that it will start the production of the iPhone 14 series in India sooner than expected as it intended to move its production facilities out of China completely. That was nearly two weeks ago.
Google, Apple, and several other foreign tech companies have been looking to reduce their dependency on China and shift the production and assembly of products to other markets. One of the main reasons behind this shift is the harsh COVID-19 lockdowns imposed in the country, which have adversely impacted the manufacturing and supply chains of many foreign brands. But that is far from being the only reason, and the current relations between China and others also come into play.
It is no surprise that there are growing tensions between China and the US, something that had seen a tariff war going on. This resulted in both countries imposing tariffs (that amount to billions) on each other’s exports for a good chunk of the Trump administration – a trade war that economically hurt both countries.
The escalating geo-political tension between Taiwan, one of the world’s leading semiconductor suppliers, and China, is another contributing factor. With China cracking down hard on Taiwanese shipments and making logistics a nightmare, things have been hard enough for foreign brands to have a steady and uninterrupted supply of products.