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U.S. tech giants plan to shift hardware assembly away from China

Author : Saipriya Iyer | Published Date : 2020-03-06 

With the ongoing U.S.-China trade war and recent outbreak of the deadly new coronavirus in the world’s second largest economy, the leading American tech firms Google, Microsoft and Apple are reportedly looking to moving production of their hardware products out of China. However, mitigating reliance on China could be quite challenging.

Microsoft and Google are accelerating their efforts to shift production of their hardware products to other parts of Asia. The biggest issue that surfaces is that moving supply chains quickly to other countries in Asia is a laborious task and China still has a major role to play. This further implies that transferring the risk is a lot harder. 

As per sources close to the matter, Google is set to initiate production of an upcoming low-budget smartphone (rumored to be called the Pixel 4a) in Vietnam by April. An upcoming flagship smartphone by Google will also be manufactured in Vietnam in the second half of the year.

Reportedly, Google is in deal with a Thai manufacturing partner to prepare production lines for voice assistant-enabled speakers and other smart home products. On the other hand, Microsoft is planning to start production in Vietnam in the second quarter of 2020 for its Surface line of desktop PCs and notebooks.

In 2019, Apple was looking forward to starting a trial to produce its AirPods in Vietnam and also asked the suppliers to try and shift 15-30 percent of its production from China to other South East Asian countries.

On the current scenario, P.S. Subramaniam, Partner at A.T. Kearney was reportedly quoted saying that nearly 40% of finished goods globally are sourced from China but there is capacity in other areas of the world too and it is easier to branch out away from China for a short term for most of the businesses, who have considerably developed product and assembly process documentation.

Subramaniam added that around 60% of modules are made in China and is harder to move away, however, it is still feasible.

 

Source Credit: https://www.cnbc.com/2020/03/05/coronavirus-apple-microsoft-google-look-to-move-production-away-from-china.html

About Author

Saipriya Iyer

Saipriya Iyer

Saipriya Iyer presently works as a content developer for fractovia.org. Having dabbled with the domain of content creation for nearly half a decade, she now boasts of an enviable portfolio, holding substantial experience in penning down pieces related to technology, finance, and a wide spectrum of other industry verticals. A qualified computer engineering graduate from the University of Pune, Saipriya can often be found leveraging her knowledge of software technology and electronics in her write-ups. She can be contacted at- [email protected] | https://twitter.com/saipriya_i

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