Google plans to end Pixel hardware production in China by next year, shifting manufacturing to Vietnam amid ongoing US-China tensions. This makes Google the second smartphone company after Samsung to move production outside China. The company aims to increase Pixel shipments by 8-10% this year despite rising memory chip costs.

Meanwhile, small batches of Nvidia's H200 chips are entering mainland China to support AI companies like ByteDive and Tencent, each receiving approximately 10,000 processors. However, Chinese regulators want most chips kept outside the mainland to support domestic chipmakers, with Hong Kong emerging as an alternative destination despite limited data center capacity.

The AI infrastructure boom continues driving massive capital expenditures across the supply chain. Quanta increased its capex to NT$40 billion, expecting global AI server capacity to double by year-end with orders full until 2028. Lite-On Technology and Unimicron also raised spending to record levels, while Foxconn plans 30% spending growth from last year's NT$173.8 billion.

Production equipment bottlenecks persist with lead times reaching 30-50 weeks for testing equipment and high-end glass cloth machinery. China's export controls on rare materials and geopolitical tensions add further complications to supply chains.