COVID-19 Accelerating Manufacturing Shift to Vietnam

Mar 2020

In early March 2020, it was reported that the launch of Google’s latest smartphone, the Pixel 4a, may be delayed as production might not be able to reach sustainable levels in China in the near future. Therefore, Google is considering shifting Manufacturing to Vietnam, where the situation is seemingly still under control. A report also suggests that Google might decide to manufacture the Pixel 5 in Vietnam.

Similarly, Samsung has reportedly shifted Manufacturing operations and production to its Vietnam plant, as the company had to shut down its South Korean plant in Gumi for a few days due to rising coronavirus cases. Samsung expects that the Vietnam factory will compensate for the shut down of operations in the Korean plant, which is used for Manufacturing high-end smartphones like the Galaxy Note 10+, Galaxy S20 and Galaxy Z Flip for the domestic market in Korea.

Most smartphone manufacturers are seeking to diversify their production base. One of Apple’s Manufacturing partners, Winstrol Corp, plans to move half the company’s capacity outside of China in around a year’s time. The company had already started shifting production out of China since the trade war between the US and China reached a boiling point last year. Wistron Corp is  looking at India as the next Manufacturing hub, and also considering Vietnam and Mexico as alternatives. Another Apple partner, Pegatron is also looking at expanding Manufacturing sites countries such as Vietnam, Indonesia and India.

Before the Covid-19 outbreak, Vietnam was one of the main beneficiaries of the US-China trade war, with a growing number of manufacturers moving their operations into the country. The virus could further accelerate this trend.

(Sources: Techradar; Android Headlines; digit)

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