HANOI - In the coming weeks, Apple and Google will unveil their latest generation of smartphones, jockeying to distinguish the new devices from previous models. But one of the most significant changes will go largely unnoticed by consumers: Some of these phones will not be made in China.and part of Google's newest Pixel phone production will be done in Vietnam, people familiar with their plans said.
China is still, by far, the most dominant consumer electronics manufacturer. But it's not just smartphone production that is moving out of the country. The fracturing supply chain is rippling across Asia, causing a spike in industrial land prices in Vietnam, a revival of manufacturing in Malaysia and a surge in demand for low-wage workers in India. For China, it is siphoning away manufacturing activity when the country is reeling from its slowest economic growth in decades.
Vietnam, which Apple had already earmarked for AirPods production in 2020, became a much-discussed option, one of the people said. Since then, Apple has started producing its watch in the country and moved some iPad manufacturing there. In Apple's most recent list of its top 200 suppliers, 20 use factories in Vietnam. By comparison, 155 of the companies operate factories in China.
In Bac Giang and Bac Ninh provinces in northeastern Vietnam, Foxconn and other contract manufacturers operate massive factories in scenic countryside that was once rice fields and farmland, surrounded by temples, banyan trees and ponds. Now workers from around the country descend to these facilities in search of jobs.