Alphabet’s (GOOGLGet Report) Google unit is set to move some production of its mid-priced Pixel smartphone to Vietnam from China, according to a report Wednesday in the Nikkei.

The shift comes on the back of rising Chinese labor costs and a deteriorating U.S.-China trade war. 

Not all Google phone production is expected to leave China. But some manufacturing of the Pixel model 3A will move to Vietnam by the end of the year, according to the report. It will involve retrofitting an old Nokia factory in the same region of the country that Samsung set up a smartphone supply chain 10 years ago. 

Google aims to ship between 8 and 10 million smartphones in 2019, making Vietnam a key part of Google’s drive for growth in the smartphone market, according to the Nikkei report.

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