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Decoupling Accelerates: Google And Microsoft Shift Production From China

Earlier this month, we mentioned how the Covid-19 outbreak would force companies with high centration of supply chains in China to “rework” operations to other countries to avoid future disruptions.

Nikkei Asian Review confirmed our thoughts on Wednesday when sources said Google and Microsoft, who are currently experiencing supply chain disruptions in China, will shift production of their phones, computers, and other devices to factories in Vietnam and Thailand in the coming months.

Two sources with direct knowledge of the shift said Google would begin production of its Pixel 4A smartphone in northern Vietnam in April. The Pixel 5 will start production in 2H20 in the Southeast Asian nation.

Google asked a manufacturing partner in Thailand to immediately start production of its “smart home” related products, with expected delivery no later than 1H20, one source said.

Microsoft could have production online of its Surface devices, notebooks, and desktop computers in northern Vietnam sometime in 2Q, another two sources said. “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 told Nikkei.

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