Amid rising labour costs and intense competition from local brands in China in 2008, Samsung made the decision to diversify its supply chains and manufacturing to multiple countries in Southeast Asia. The move aimed to reduce its reliance on China.
Fast forward to 2026, and the company now holds less than 1 per cent market share in China after completely halting its own smartphone manufacturing in the country in 2019. Shifting its supply chain saved the company from the Trump administration's triple-digit tariffs on Chinese goods in April 2025 and disruptions during the COVID-19 lockdowns.
Apple, which also manufactures in China, followed Samsung. The company started diversifying its operations after it faced COVID-19 disruptions and workers' protests at its main manufacturing plant in China in 2022. Trump tariffs further escalated this movement.
As a growing market with cheaper labour incentives, India continues to be a favourable location for both companies. Samsung built the world’s largest mobile factory in Uttar Pradesh in 2018, with a production capacity scaling up to 120 million units per year.
Vietnam was also identified as a convenient location. Apple has transferred part of its watch and iPad production to the country.
According to a report by Nikkei Asia, Google is the next in line to stop producing Pixel smartphones, smartwatches, and wireless earbuds in China starting next year. The decision is amplified by strained US-China relations, which are pushing technology companies to change their sourcing and supply chains.
US reciprocal tariffs for electronics have dropped from 46 per cent to 20 per cent for Vietnam. However, India’s rates are still lower, around 18 per cent, which can give an upper hand in negotiations.
The company has been expanding manufacturing capacity in Vietnam and India. Google utilises Foxconn in Tamil Nadu and Dixon Technologies in Uttar Pradesh to assemble budget-friendly Pixel devices.
The report added that Google wishes to increase its Pixel sales, despite memory chip prices increasing by nearly 500 per cent in 12 months.
The company’s smartphones are also a key method to bring more users to its Gemini artificial intelligence. Google launched the Pixel 11, Pixel 11 Pro and Pixel 11 Pro Fold last week, starting at $899 for the 256GB versions. The previous Pixel 10 range began at $799.
The higher pricing, combined with shifting and diversifying manufacturing locations, is expected to increase shipments.
