Report: Google shifting Nest, other hardware manufacturing out of China

Google is taking proactive measures to counter the possible effects of the U.S. trade war with China. A report today revealed that Google is shifting Nest and server hardware manufacturing meant for the United States out of China into Taiwan.

According to Bloomberg, Google has “already shifted much of its production of U.S.-bound motherboards to Taiwan.” These components are crucial to powering data centers around the world, with Google taking a more proactive approach than its competitors in light of tariffs and “an increasingly hostile government in Beijing.”

While the likes of Amazon (AWS), Microsoft (Azure), and Facebook purchase complete server racks, Google only procures individual components for later assembly. Those motherboards — categorized as “printed circuit board assembly” — are subject to 25% tariffs when imported into the U.S., while server racks are not.

Bloomberg also noted a Google shift of Nest manufacturing from China to Taiwan and Malaysia. The report only specifies thermostats for the U.S. market, with the lineup now consisting of Assistant Smart Displays and soon speakers, as well as security cameras and other smart home devices.

Of course, compared to Apple, Google produces hardware at a much smaller scale, with other Made by Google products like the Pixel 3, Nest Hub, and upcoming Nest Hub Max still manufactured in China.

Google, especially following the acquisition of HTC’s smartphone division, has a sizable presence in Taiwan. In 2017, Google announced the $1.1 billion deal to take on 2,000 HTC employees already working on the Pixel. That HTC team is responsible for the Pixel 3a and Pixel 3a XL.

Meanwhile, Google in March announced that it was expanding its Taiwan presence with a new campus and hires. It will allow Google to double the size of teams working on hardware and software. Bloomberg notes that the shift is a boon to Taiwan’s manufacturing industry.

This is a great opportunity to bring teams together and provide room for continued growth. The new space will allow us to more than double the size of our team here in the coming years, helping us continue to work on offering the best Google experiences via our hardware and software to people all around the world.