Apple's foundry automation will speed up the reduction of five adult manpower?

China Business News

2024-06-27 08:21Official account of China Business News

Reporter Chen Jialan reports from Guangzhou

Recently, a report by foreign media has once again triggered a discussion about Apple's OEM automation will reduce labor costs on a large scale.

The Information, a paid technology media in Silicon Valley, reported that in order to avoid the shutdown of Foxconn in 2022, Apple has spared no effort to promote the deployment of factory automation in recent years, and has asked foundries to reduce the manpower of iPhone assembly lines by 50% in the next few years.

China is the main production area for iPhone assembly, and if the manpower on the assembly line is significantly reduced, it will undoubtedly have a profound impact on China's labor market.

As for the report of The Information, many industry insiders did not agree that it was Foxconn's shutdown that caused Apple to plunge into the process of iPhone production automation, and Apple has been implementing automated production. As of press time, Apple has not replied to this reporter on related issues.

According to the report, Apple has always planned to try the iPhone assembly automation project, which was previously shelved due to the high cost. The shutdown of Foxconn made Apple determined to implement an automation project, and Apple's iPhone 15 series achieved "a lot" of automation, but due to the complexity of production, automation still poses challenges for Apple. According to the report, the "high defect rate" is the biggest problem in the current iPhone assembly automation project, causing Apple to cancel some of the automation processes of the iPhone 16 series. Three people working in Apple's supply chain revealed that this year Apple continues to focus on and promote automation technology, using robots to install iPhone buttons, receivers, speakers and main logic boards into the phone.

Ivan Lam, senior analyst at Counterpoint, said: "The information is distorted and over-correlated with automation targets and factory manual adjustments. Ivan Lam told reporters that The Information's report strongly correlates Apple's automation goals, Industry 4.0 trends and factory manual adjustments, ignoring the complexity of park management and Apple's long-term vision of factory globalization and production automation.

Mr. Li, a veteran of the labor industry, also told reporters that Foxconn is automating every year, and the reduction in manpower in the iPhone assembly line has a lot to do with Apple's automation, but the reduction of 50% is an exaggeration.

In terms of Apple's share of iPhone foundry, Foxconn accounts for the majority, followed by Pegatron, and in recent years, Lixun Precision has begun to further increase its proportion in iPhone foundry.

As Apple's largest OEM, Foxconn has taken many steps in automated production lines in the early years, such as the construction of "lights-off factories" and "machine substitution". According to the information disclosed by Foxconn, the workshops of the Industrial Fortune Union Jiyuan Park have achieved a high degree of automation and intelligence, among them, in the A03 and A05 workshops, nearly 500 pieces of equipment are operating normally, but only more than 40 production technicians shuttle between the machines to inspect and maintain. The number of employees at Foxconn's plant in Kunshan, Jiangsu Province, was reduced from 110,000 to 50,000 as a result of the automation project.

In Ivan Lam's view, Foxconn has been gradually promoting production automation, but not all production lines can be upgraded in one step, and automation is the dismantling and gradual upgrading of each process.

Ivan Lam said that starting from the iPhone 12 and iPhone 13, the basic version has a high degree of modularity, and each large module component is produced in China and then shipped to global factories for simple assembly. At the same time, it also facilitates the increase in the proportion of automation in Chinese factories, and also facilitates the implementation of local production in India, where the manufacturing capacity is in the initial stage.

Liu Zongchang, chief data officer of Foxconn Industrial Internet Co., Ltd., also responded recently: "Foxconn has an internal automation team of more than 3,000 people, and invests more than 8 billion yuan in the automation integration of the whole line every year. ”

For another example, Pegatron Technology, Luxshare Precision and Apple have also made achievements in precision manufacturing and automation, Pegatron Technology launched an automated production line for the Shanghai factory in the early years, and some of the 50,000 workers in the production line only need 20 people.

Wang Laichun, chairman and general manager of Luxshare Precision, said in 2023 that Luxshare Precision has a central automation team of 4,000 people to meet customers' needs for automation in different products such as precision parts, modules and system assembly. Luxshare Precision has deployed tens of thousands of precision automation equipment and tools to help Apple products such as iPhone, Apple Watch, AirPods and Apple Vision Pro achieve high-quality manufacturing. From high-precision assembly of iPhones, automated optical detection of Apple Watches, and smart warehouses with automatic packaging and automatic loading and unloading of products, Luxshare Precision is actively leveraging the potential of smart manufacturing for data-driven decision-making.

According to Apple's annual supply chain report, the total number of full-time employees at its manufacturing partners fell from 1.6 million in 2022 to 1.4 million in 2023.

Apple believes that although the initial investment in automation is large, in the long run, it can greatly reduce the demand for ordinary manpower, realize round-the-clock operation, and theoretically reduce the production cost of iPhones and other products.

"Apple has strict control over supply chain costs, and the adjustment of the assembly link has a limited impact on the production cost of iPhone, and the main cost adjustment may come from chips and other devices." In Ivan Lam's view, automation is the pursuit of cost benefits, supply capacity and quality of the comprehensive improvement, in the short term the benefits may not be obvious, but in the long run efficiency improvement will bring significant benefits, automation represents efficiency improvement and industrial upgrading, all mobile phone manufacturers are optimizing the degree of automation of production lines.

In Mr. Li's view, the original Foxconn is about 5% of the annual proportion of machines to replace people, which will have a certain impact on the reduction of labor, but in recent years, affected by the international situation, Foxconn and Pegatron have increased investment in India, and the domestic automation transformation may not be as great as in the past.

(Editor: Wu Qing Review: Li Zhenghao Proofreader: Zhang Guogang)