(Chinese Version)

At 7:40 am, Foxconn’s Guanlan factory in Shenzhen is already a busy scene crowed with people. Feng Ke finished his breakfast at the dinning hall fast and went to the factory. Everybody knew that Foxconn is Apple’s main OEM and that the factory needs to delivery a mass amount of light black iPhone 7 Plus by the end of November, which means the factory will be insanely crazy.

It’s a challenge to all to do simple and repetitive labor for a long time. Feng Ke has been the by production line that processes iPhone medal phone case for many years. Years have gone by, taking away Feng Ke’s youth, also leaving time’s marks on him.

Feng was one of those who experienced the Foxconn suicide incidents and Sweatshop incident, the bad sides. But he was also a witness of Foxconn’s prosperous golden age, during which the OEM giant took great leaps forward. Feng and his colleagues’ annual salary rises with the great performance of Apple’s smartphone launch every year. What truly makes him feel threatened is the the number of the robots in the factory is rising with every passing day, as Foxconn is implementing 10,000 robots every year to replace human labor.

Media reported that Foxconn has installed around 40,000 robots in its factories in China, so as to cut down the company’s employees. Foxconn’s factory zone in Kunshan has relieved 60,000 employees during the last seven years for that.

In Foxconn’s founder Guo Taiming’s vision, there will be one million robots within the company in the future.

Statistics from National Bureau of Statistics of China show that in 2015, the production output of industrial robots in China was 32,999, a 21.7% year-on-year growth. The output has maintained a high growth since January to August this year, achieving an amount of 45,439, a year-on-year growth of 33.1%. The growth rate is 11% higher than that of 2015.

Qu Guochum, deputy director of Ministry of Industry and Information Technology’s industrial equipment department has recently stated that China’s robotics industry is developing at a rocket speed and has been the world’s largest industrial robot market for three consecutive years.

iPhone 7 workshop: there are more robots than humans

Lift up the module, turn around and then put it down…everyday the robots at Feng Ke’s workshop repeat the same labor day in and day out. This workshop had its first robot in 2012. In the last four years, the human workers here had reduced from 1000 to 300, while the number of robots grew from 1 to over 180.

With the help of robots, the workshop will have to finish metal processing of 16,000 jet black iPhone 7 plus everyday. These half completed products will be then shipped to foxconn’s factories in Zhengzhou to be assembled. The completed iPhones will be shipped from Zhengzhou Xinzheng Comprehensive Bounded Zone to the world.

In 2011, Guo Taiming, CEO of Foxconn, announced the Million Robots plan, which states that the company is planning to bring one million robots to the production line. FOXBOT, independently developed by Foxconn, has been put into mass production in Jincheng, Shanxi province, truly making part of Foxconn’s manufacturing power.

Five years have passed and more than 40,000 robots have been applied in Foxconn’s manufacturing process, according to the statistics recently announced by Dai Jiapeng, general manager of Foxconn automation technology development committee.

A720, A728, S600, and A700……these are the names for the 180 FOXBOTs in Feng Ke’s workshop. The robots are responsible for stacking, picking up materials, and carry light packs. Feng Ke has very complication opinions towards these robotic colleagues. “Now robots are only doing some very simple and repetitive work, which can really free human workers from those boring posts. But most of the time, like when it comes to inspection of appearance etc., robots can’t really do what humans do,” he said.

However, the decline of human workers around Feng and his colleagues also make them feel the threat. Two thirds of human workers are replaced by robots in total.

In this workshop, there are more robots than humans. Although there are still 300 human workers, they take two shifts and every shift has a team of 150 people, which is 30 lesser than the number of robots working there.

Year-end bonus: The iPhone4s era was the peak time

The largest OEM empire Foxconn is facing a mid-life crisis in recent years. China’s demographic dividend is fading fast as manufacturing hubs like Shenzhen and Kunshan etc. are losing orders from major clients like Apple to other OEMs that charge lower.

It’s reported before that WISTRON might be working with Foxconn and PEGATRON as a third-party manufacturer to produce iPhone 7.

Foxconn’s concern is reflected on workers’ salary. In the last few months, workshops have been firing up to deliver Appple’s iPhone 7/7 Plus order, during which workers that have been working in Guanlan for a certain time were able to earn up to ￥6,000 per month while the new worker could get ￥4,600. But when the order completes in the end of November, there won’t be any overtime opportunities for workers, which will result in salary decrease. Groups of workers will leave the company for that.

The year-end bonus is actually an indicator that tells the amount of orders from Apple. Li Xiao is an old worker in Foxconn. In late 2011, Apple’s revolutionary iPhone4/4S brought him a year-end bonus of ￥4,800. But the number remains below that ever since.

Guo Taiming is hoping to fight this crisis with robots. Though the number of robots being applied in production is still far from enough, Guo Taiming made an official announcement that the company would achieve an automation rate of 30% by 2020 on the 2015 annual meeting.

Foxconn’s automation expectation is based on the maturing industrial robot industry and smartphone brands’ growing demand for precision.

In 2015, robot exhibitions were incredibly popular, among which flexible robots with 6-7 degree of flexibility were the center of attention. These flexible robots are fitted for flexible production lines that have a compact layout and require high precision. These robots are pretty much as flexible as human hands.

The fierce competition between smartphone makers also raises the bar for manufacturing. It’s reported before that when manufacturing iPhone5, there were some 1.5 millimeter nuts that could only be screwed in by robots since human eyes and hands couldn’t really handle nuts that small.

transition: From production line workers to robots’ masters

Feng Ke doesn’t really know what the big bosses’ visions are. What he wants to know is if he will still be able to work in Foxconn after a few years.

Up till now, the 180 robots in the workshop bring about positive changes for Feng Ke and his colleagues. In the past they would need to work standing for ten hours. Even bowing a bit to pick up a screw was a pleasure to them. Now robots have freed them from all those repetitive work, from the production line. Human workers now are responsible for works that require flexibility. The production line here is half manned and half automatic.

The working environment has also been improved. Metal processing involves a cool down process, and therefore the workshop was wet and oily before. Feng Ke still remembers when he first walked into the workshop he had to be very careful. Every time the environment inspection team would turn a blind eye to this situation. But now the workshop is entirely different thanks to the implementation of robots. Oil mist can corrode robots’ computer motherboard and break them. That’s why the environment must be improved. Now you can even see flowers and plants inside the workshop.

However, to achieve a automation rate of 30%, cutting down the number of human workers is inevitable. “Even if robots can’t replace humans entirely, there will still be more robots than humans. That’s the tendency.” In the past two years, leaders of the company had mentioned automation upgrade and smart manufacturing etc., which in fact pushed Feng Ke to make his own transition, that is become robots’ master instead.

Feng Ke’s role model is one of his colleagues, whose base salary has raised from ￥2000 to ￥4000 after receiving training on robots and getting a transfer of position.

The truth is, whether robots can replace humans or not is not the core reason for the loss of jobs for human workers. Once the factory achieves a certain point of automation, the number of production line operators will naturally decline while the number of technical staff will increase. The whole worker structure will transform from a pyramid to a trapezoid.

After announcing the One Million Robots project in 2011, Foxconn has been consciously training its workers to become technical staff. Workers in Shenzhen Guanlan factory zone holding a bachelor degree can apply for the training program after robots entered the factory. Applicants will receive fulltime training at Jiangnantong Precision Module Training Center for three months, studying courses regarding automatic operation.

Given the fact that production line workers’ education background is generally not good(high school and professional school graduates), Foxconn allows its workers to apply for IE schools, colleges, training centers that are in cooperation with Foxconn to get a college degree first. “We will cover 50% of the training cost. For example, to get a college degree from Wuhan University of Technology, the tuition fee will be ￥16,000. Foxconn will provide a ￥8000 subsidy.”

However, robots are coming so fast that Foxconn doesn’t really have time to pump up the technical talent pool for such automation. This is a common obstacle to be tackled for enterprises going into smart manufacturing.

“In recent years, the industrial robot industry in the country is soaring. When traditional manufacturing companies are going automatic, production line workers who have a lower education background are gradually losing their jobs to robots. But companies fail to match the update of automation technology with an improved talent pool.” Luo Jun, executive chairman at International Robot and Smart Manufacturing Alliance, told ITtimes. “They will need to find more ways to train professional talents for automation.”

Experts: It still takes another five to ten years for robots to replace human workforce

“Foxconn is the earliest OEM of Apple that implemented robots in production. Automatic production usually adopts double-axis and four-axis robots. But it’s unrealistic to use robots entirely to produce sophisticated products like smartphones.”

N1Mobile’s president Sun Yanbiao believes smartphones produced by humans are necessarily worse than those from robots. But an automatic workshop still means more orders from the clients. It’s reported that Foxconn had given out orders from Apple and Huawei to second-tier and third-tier suppliers, who didn’t have the capacity to cover the cost of bringing robots in. Eventually the amount of orders declined and some of these suppliers went down.

Wang Yanhui, secretary of CNMO, told ITtimes that it’s an irreversible tendency for human workforce to be replaced by robots gradually, and that companies must have mass production volume and a standard production mechanism before implementing robots. Companies’ technological development and capital power also matter, he added.

At present, robots are expensive and still lack flexibility and accuracy, therefore there’s still a long way to go for them to replace human labor entirely. Still, for workers who work in factories where robots are emerging, the reality is robots are indeed taking away more job opportunities.

China’s manufacturing industry is transiting from labor-intensive to technology-intensive currently. According to 2016-2022 Chinese Robotics Industry In-depth Research and Prospect Report, in 2014 the sales volume of industrial robots in China hit 56,000, with a growth of over 50% for two consecutive years. “From the statistics, you can pretty much tell how fast Foxconn is replacing its human workforce with robots,” said Luo Jun.

Smart manufacturing is still in its starting phase in China, Luo Jun explained. According to him, in five years there will be a big shift where traditional manufacturing companies will massively go into smart manufacturing, and that in ten years the number of smart manufacturing companies will be stunning. During the five or ten years the traditional manufacturing sector will complete their industrial upgrade, which is a milestone event that marks China entering the early phase of smart manufacturing with some companies entering the mid and high-level phase.

Truth behind Foxconn Kunshan’s massive staff reduction of 60,000: The decline of orders

Not long after the National Holiday, rumors had it that Foxconn was accelerating its robot-replacing-humans project, and that Foxconn’s factory in Kunshan, Jiangsu province had laid off 60,000 workers.

On October 10th, ITtimes went to Kunshan to cover this story. After investigation, we found that such rumors weren’t accurate. It’s true that the number of workers had indeed reduced from 110,000 to less than 50,000 in Foxconn Kunshan, but that’s not the whole story. It wasn’t robots that caused this decline, but the gradually declining orders and the fact that the production line is moving to mid-west.

The two Foxconn factories in Kunshan have never stopped hiring new workers. Some staff told ITtimes that everyday they have more than 100 new workers coming in and and more than 100 leaving, which is quite normal for Foxconn. Foxconn has never purposely lay off its staff.

It’s an undeniable fact that the Foxconn factories in Kunshan are receiving less orders. Production line workers generally make money through working overtime since the base salary is quite low. But now it’s very hard for them to find opportunities to work overtime while having the maximum overtime limit of two to three hours. It directly results in the decline of income, and therefore many workers are resigning.

Besides, the reduction of 60,000 workers isn’t a sharp and sudden decline that took place in one year, but more of an outcome developed through years. Foxconn’s factories in Kunshan mainly manufacture laptops and accessories. However, the global computer sector is shrinking so relevant orders are declining continuously.

On the other hand, considered the labor cost in Kunshan is already too high, many production lines in that area are moving to mid-west. The staff told ITtimes that currently dormitories in the two factories in Kunshan are hardly filled, with most 8-people dorms only have four people living in side. Foxconn even has to close downs some dormitories.

Although robots are not the main cause for the mass reduction of workers for Kunshan Foxconn factories. But Foxconn’s automation and smart manufacturing strategy will bring in more robots to the factories in Kunshan. ITtimes learned that Foxconn has deployed 40,000 robots in China. These robots are sent to Foxconn’s production bases in Zhengzhou, Chengdu, Kunshan and Jiashan, mainly working for laptop and accessory production.

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[The article is published and edited with authorization from the author @ITtimes, please note source and hyperlink when reproduce.]

Translated by Garrett Lee (Senior Translator at PAGE TO PAGE), working for TMTpost.