Google is moving some of its manufacturing to avoid higher tariffs on imports.
What you need to know
- Tariffs from the trade war would have put a 25% tax on motherboards imported to the U.S. from China.
- Google has shifted production for most of its U.S.-bound motherboards to Taiwan.
- Production for American-bound Nest products is also being moved to Taiwan and Malaysia.
In response to the tariffs and an increasingly unfriendly Chinese government, Google's parent company Alphabet has begun moving production of its U.S-bound motherboards and Nest hardware out of China.
According to some sources speaking with Bloomberg, Google has moved much of its U.S.-bound motherboard manufacturing to Taiwan. The shift comes in response to a 25% tariff placed on the import of printed circuit board assembly products.
The motherboards are most commonly used in servers for Google data centers to power some of its most popular and profitable services, including Search, Maps, cloud services, and much more.
Other companies that operate large data centers such as Amazon, Facebook, and Microsoft haven't felt the sting of the tax so far because whole server racks are not affected by the tariff. Since Google assembles most of its U.S.-bound servers in Mexico, it would have been one of the companies impacted most by the 25% tax.
However, the chairman of Wistron Corp. (the company which makes servers for Facebook and Microsoft) recently said that it is currently looking to shift some of its operations outside of China as well.
That's not the only product moving its production though, as the source also mentioned Google is shifting manufacturing of its U.S.-bound Nest products to Taiwan and Malaysia.