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Apple's secondary manufacturer, Pegatron, is following in the footsteps of Foxconn and beginning to automate its factories — and cutting back on new hires as a result, according to the company's chairman.
With automation in place, Pegatron is recruiting fewer workers at its Shanghai factory, DigiTimes quoted T.H. Tung as saying in response to Chinese media reports. The facility should be able to use 20 people to do what previously took 100, Tung claimed.
It's not clear how many Pegatron production lines have been automated, but transition solves two problems for the company's management: the increasing difficulty of finding enough people to do menial assembly work, and the cost of hiring them, given improvements in wage standards.
Indirectly that change should benefit Apple, since cheaper labor costs at Pegatron may mean lower order quotes, and hence higher profits on Apple's end.
Foxconn is already making large strides in automation, for instance shrinking the workforce at its Kunshan factory from 110,000 people to only 50,000. Concerns have been raised about the socio-economic fallout of that sort of shift, given thousands of people being put out of work or forced to find it elsewhere. Kunshan has a large population of migrant workers, and if they leave in droves, that could impact not just them but the local economy for those who remain.
Pegatron is believed to be handling at least a portion of this fall's "iPhone 7" production, but only 4.7-inch models, not any 5.5-inch units.