Meta working to move half of MR glasses production to Vietnam and outsource hardware design

Tech giant Meta (NASDAQ:META) is relocating part of the development and design of its mixed reality headsets to Chinese contract manufacturer Goertek, The Information reported Thursday, citing a Goertek employee and two employees at Meta. The move is expected to prevent deep financial losses and navigate a possible trade war between the U.S. and China.

The report, citing a Meta employee, said the company is working with Goertek to move up to half the manufacturing of Quest headsets to Vietnam from China over the next several years. A Goertek employee said the company had already been planning to move some production of Quest headsets to Vietnam, as U.S.-China tensions escalated.

Meta wants to shift more of the design of components such as lenses and displays to Goertek over time, the report said. According to one of the Meta employees, the company hopes Goertek and other potential manufacturers will fully develop its mixed reality headsets as original design manufacturers by 2030. This will allow the company to deepen its focus on the more profitable software business.

The Meta-Goertek relationship is now similar to joint design manufacturing, under which Meta tells Goertek its goals and requirements for its devices, Goertek proposes multiple options, and Meta chooses from them, the report said.

If it all goes well, Goertek could one day take over the design of the AR glasses, the Goertek employee reportedly said. In the new relationship, Goertek handles more of the electrical engineering for Meta’s devices, including tasks such as how to connect chips with sensors within a device.

Goertek has begun designing the outer shell for future versions of Meta’s mixed reality headsets, according to one of the Meta employees. It is also playing a larger role in research and development for other Meta devices such as the Ray-Ban smart glasses.

The report also said some of the recently laid-off Meta employees, working on hardware in Shanghai and Shenzhen, were being recruited by Goertek.

Some Meta contractors, including those involved in testing and manufacturing, are also shifting to Goertek, according to one of the Meta employees.