China, long the “factory of the world” and the primary location for manufacturing smartphones, is losing its primacy. Due to costs and regulations, the trend of smartphone vendors moving manufacturing to other parts of the world is accelerating.

Sony is the latest vendor to shift smartphone manufacturing from China. The struggling smartphone maker is closing its Beijing smartphone factory and shifting manufacturing to its Thailand plant as a way to cut production costs. The company will continue to outsource some production to contract manufacturers as well.

Sony accounted for less than 1% of all handsets shipped in 2018 and is looking to reduce costs as it looks to return to profitability in 2020. Migrating smartphone production to Thailand will be an important element in its efforts to control costs.

The shift by vendors of production away from China is not limited to Sony, and Thailand is not the only beneficiary. Lower costs, favorable taxes and international trade-wars are making India an attractive location for manufacturing phones. Sony is not the first phone maker to move production out of China – nor will it be the last.