Google, Microsoft to move production away from China over coronavirus concerns

Trade war, coronavirus catalyzing tech firms to relocate production

A computer on display at a Microsoft store in suburban Boston.

A computer on display at a Microsoft store in suburban Boston. (AP photo)

TAIPEI (Taiwan News) — Tech giants Google and Microsoft are reportedly expediting plans to shift production of new products from China to Southeast Asia as supply chains in China are being derailed by the Wuhan coronavirus outbreak.

Google will be manufacturing its Pixel smartphones in Vietnam as early as April, while its smart speaker series, Nest Mini, is already being made in Thailand and is expected to be rolled out in the first half of this year, wrote the Nikkei Asian Review.

Microsoft is also relocating the manufacture of personal PCs, laptops, and tablets to Vietnam from China, the hardest-hit area by the COVID-19 virus, according to the report. The company has warned of a slump in its personal computing business sales, including Surface tablets, due to delayed resumption of work at its factories in China, reported the BBC.

Apple has also suffered from the disrupted supply chain, and Foxconn, its major supplier, has announced a host of incentives to encourage the recruitment of employees for assembly plants in Chengzhou and Shenzhen in order to minimize the impact on deliveries of iPhones. Foxconn has also ramped up production capacity at facilities in Vietnam, India, and Mexico, according to a statement put out by the company.

Former Macy’s CEO Terry Lundgren said on Wednesday (Feb. 26) that the U.S.-China trade war and the coronavirus have demonstrated how retail supply chains have become too heavily dependent on China, reported CNBC. According to Cowen analyst Oliver Chen, approximately 20 percent of the retail supply chain is exposed to China.