Google’s Vietnam Bet Highlights New Era In Electronics Manufacturing

Google is preparing to start building its most advanced Pixel phones in Vietnam this year, according to Nikkei Asia, a move that reflects the broader effort by U.S. tech firms to reduce their reliance on China. Apple is pursuing a similar strategy in India as both companies work toward more geographically balanced supply chains.

Sources say Google will handle the earliest and most sensitive stages of production for its Pixel, Pixel Pro and Pixel Fold models in Vietnam, while the more affordable Pixel A line will continue to be developed in China. These early production stages, known as new product introductions, involve extensive engineering work, long testing cycles and major investments in manufacturing tools. For suppliers, being selected to participate is seen as a major endorsement of their technical capabilities.

Nikkei says that although Google and Apple have spent years trying to expand manufacturing outside China, they have continued to rely on Chinese facilities for these initial development phases because few other countries have the same depth of experience and infrastructure.

Recent geopolitical and trade tensions, especially surrounding U.S. tariff policy, have added urgency to these efforts. Apple has already increased production capacity in India and Vietnam.

“The goal is to achieve functionality, compatibility and reliability suitable for mass production. If NPI fails, then it means there will be no new product for the year. But thankfully, such a thing has never happened so far,” a source with an Apple supplier said.

Because of the stakes, Apple is now considering running the same development process in both India and China at the same time, despite the enormous cost.

“Take Apple for instance, NPI at a site will require the company to station some 200 to 300 engineers at the supplier’s plant. The amount of investment is incredible,” said another person familiar with Apple’s supply chain.

If these initiatives succeed, both companies would be much closer to building complete smartphone supply networks outside China. Google already produces large volumes of premium phones in Vietnam and carries out some technical checks there, suggesting the transition is achievable.

Still, obstacles remain. Chinese authorities have tightened controls on the export of production equipment and on the movement of specialized workers, complicating expansion efforts in countries like India and Vietnam.

“There are so many types of production equipment, testing equipment [that] are made in China and yet it is difficult to export them to another country as Beijing does not want its manufacturing sector being hollowed out … We will just have to be patient,” one supplier source said.

Lori Chang of Isaiah Research explained that most supply-chain diversification begins with basic assembly work and only later moves into deeper development functions.

“The critical significance of NPI lies in establishing product definitions, testing standards, and stable mass-production capabilities, serving as a key indicator of a supply chain’s ability to operate independently,” she said, adding that long-term cost concerns, geopolitics and tariffs are all pushing companies to rethink where they build their products.

Both Google and Apple declined to comment.