The Nikkei Asian Review reports that Google will move its smartphone manufacturing from China to Vietnam, and some of its other hardware production to Thailand.

“The push to develop a Vietnamese production base reflects the twin pressures of higher Chinese labor costs and the spiraling tariffs resulting from the trade war between Washington and Beijing,” the publication notes. “The U.S. internet giant intends to eventually move production of most of its American-bound hardware outside of China, including Pixel phones and its popular smart speaker, Google Home, according to the sources.”

Google’s hardware has never sold well, but the firm continues to believe it can grow, especially in the smartphone market. According to Nikkei, Google internally believes it can ship 8-10 million smartphones this year. That’s double the volume from 2018, when Google sold just 4.7 million smartphones. (And less than 1/20th the number of iPhones that Apple shipped in 2018.)

Google did get some good news this year, of course: It doubled smartphone sales in the second quarter thanks to the launch of the low-cost Pixel 3a lineup. And with companies like LG and Sony struggling and perhaps preparing to exit the market, there is an in for Google in the low-volume part of the market.

Nearly 70 percent of Google’s smartphone sales, and over 2/3 of its smart speaker sales, come from the United States.