The COVID-19 epidemic isn’t just about China as several countries have now recorded several cases. The epidemic will no doubt have an effect on the global economy. Just recently, Samsung Electronics closed down its factory in South Korea after a worker tested positive to the viral disease. The Chinese economy is presently worse-hit as several companies have moe out with more foreign companies planning to do so.
A report carried by Nikkei Asian Review reveals that two tech giants Microsoft and Google are working assiduously on efforts to shift production of their new phones, personal computers and other devices from China to Southeast Asia amid the worsening coronavirus outbreak. Factories in Vietnam and Thailand are the likely beneficiaries, the report added.
Google is expected to commence the production of its latest low-cost smartphone which is said to go by the moniker Pixel 4A. The production will be carried out by Google’s partners in northern Vietnam as soon as April. Nikkei quotes two people with direct knowledge of the matter to have disclosed that the US company also plans to commence the manufacture of its next-gen flagship that will go by the name Pixel 5 in the second half of 2020 directly from the Southeast Asian nation (Vietnam).
On its part, Microsoft is said to have scheduled the commencement of production of its Surface line which includes notebook and desktop PCs in north Vietnam in the second quarter of 2020 at the earliest. “The volume in Vietnam would be small at the beginning, but the output will pick up and this is the direction that Microsoft wants,” a supply chain executive with direct knowledge of the matter told Nikkei.
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China remains the most cost-effective hotbed for manufacturers but the coronavirus epidemic that is yet to get any effective containment is forcing companies to seek alternatives. Even before now, Trump’s trade ban on China had brought up the need to diversify from relying solely on China. Google is reported to have asked a long-time manufacturing partner to help ready production lines in Thailand for its “smart home” related products, including voice-activated smart speakers like the Nest Mini. The first products are expected to start shipping in the first half of 2020, the sources said.
It is easier for internet companies such as Microsoft and Google to move production in a swift manner than for hardware-focused tech brands like Apple, HP and Dell, Nikkei quotes three supply chain executives to have hinted.
Google’s effort to move out of China is said to have started last year when it asked one of its partners to convert an old Nokia factory in the northern Vietnamese province of Bac Ninh to handle the production of Pixel phones. Google even asked its suppliers to evaluate the feasibility and cost implications to uninstall some production equipment and ship it from China to Vietnam via land, sea or air transportation after virus fears left production facilities unable to immediately return to work in February, one of the sources briefed on the matter said.
There has been no official statement from both companies to confirm this report.
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