Daijiworld Media Network - New Delhi

New Delhi, Aug 18: Google plans to stop manufacturing its Pixel smartphones, smartwatches and wireless earbuds in China from next year as US-China tensions continue to push technology companies to diversify their supply chains, according to a report by Nikkei Asia.

Google has been expanding its manufacturing capacity in Vietnam and India in recent years to reduce its dependence on China. While a significant portion of its production remains in China, the company now appears confident that it can move all Pixel manufacturing out of the country by 2027, a source told Nikkei Asia.

The decision follows the successful development and production of Google's high-end Pixel smartphones in Vietnam this year. The manufacture of advanced smartphones is more complex than producing smartwatches and wireless earbuds, and the progress made in Vietnam has encouraged Google to maintain its 2027 target, the report said.

If implemented, Google would become the second major global smartphone brand after Samsung to completely move smartphone production out of China.

A source quoted by Nikkei Asia said Google faces less pressure to remain in China because it does not sell Pixel smartphones in the Chinese market.

Nikkei Asia had earlier reported that Google was shifting the development of new high-end Pixel models from China to Vietnam.

Google is also seeking to increase Pixel sales despite a sharp rise in memory chip prices. The company has told suppliers that it expects Pixel shipments to grow by 8-10% this year from around 12 million units last year, according to the report.

The company sees smartphones as an important channel for bringing more users to its Gemini artificial intelligence services. This is one of the reasons Google is seeking to maintain growth in Pixel shipments despite rising component costs.

Google is also attempting to strengthen its position in negotiations with memory chip suppliers. According to Nikkei Asia, the company has combined orders for chips used in its cloud-computing business with smartphone orders while negotiating with Micron, Samsung and SK Hynix.

An executive at a component supplier to Google and Xiaomi told the publication that Google was among the few smartphone makers that had not reduced its shipment target for the year.

The executive also said Google could gain market share from Apple in the US, Japan and Europe if Apple raises iPhone prices.

Google last week launched the Pixel 11, Pixel 11 Pro and Pixel 11 Pro Fold. The new models start at $899 for the 256GB versions, compared with $799 for the previous-generation Pixel 10, which had 128GB of storage at the starting price.

Google is not the only smartphone company seeking to maintain shipment growth despite rising memory chip costs. Apple and Huawei are also aiming to increase shipments, Nikkei Asia reported earlier.

In contrast, Xiaomi, Oppo and Vivo have reduced their shipment forecasts several times this year as higher prices for memory and other components put pressure on manufacturers.

Apple Chief Executive Tim Cook has said the company expects higher memory chip costs to affect its product range this quarter. Apple has already raised prices for some existing MacBook and iPad models, as well as iPhones sold in Japan.