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Sunday, July 31, 2011, 07:00 pm PT (10:00 pm ET)

Foxconn to substitute workers with 1 million robots in 3 years

Apple manufacturing partner Foxconn has announced plans to substitute a percentage of its workers with a million robots in the next three years.

Terry Gou, founder and chairman of Foxconn, revealed during a workers' dance party last Friday that the reason for the transition was to cut ascending labor costs while improving overall efficiency. The robots will take over the basic work of spraying, welding and assembling that is usually performed by workers.

Additionally, Gou noted that at the present time the company utilizes 10,000 robots, a number that will rise to 300,000 next year and to one million in three years. Foxconn, who currently employs 1.2 million people, is the largest manufacturer of computer components in the world, assembling products for numerous tech giants, including Apple and Sony.

The manufacturer has faced difficulties with its public image after a spate of worker suicides drew the attention of international media last year. The company's response to the situation, which has included raising wages and boosting entertainment time, has also had an affect on its bottom line.

In March, one analyst expressed concerns over decelerating growth for Foxconn and its Taiwanese parent company Hon Hai. However, an attempt to link the slowdown to Apple was called into question by other analysts.

JMP Securities


Apple contributed 20 percent of Foxconn's $93.4 billion in sales last year.

According to a recent report, Foxconn was able to "protect its orders" for the next-generation iPad and fend off a challenge from rival manufacturer Pegatron, which has begun producing some iPhones for Apple and is working to expand into iPads and Macs as well.