honhai
Latest
Foxconn makes designs on the Chinese retail market, gives laborers $25,000 to start stores
Three months ago, the compensation of Chinese laborers was low enough that those who built an iPhone couldn't dream of buying one, but the spending power of China in general has increased enough that electronics giant Foxconn (aka Hon Hai Precision Industries) is actually planning to sell such goods in those laborers' home country. The Wall Street Journal reports that the company will open ten large electronics stores in Shanghai by the end of 2011, and extend its existing chains of smaller retail stores and booths around the country by about 50 and 200 respectively. The plans aren't all focused on middle- and upper-class Chinese, as they provide provision for those aforementioned laborers as well -- on top of several recent wage increases, Foxconn would reportedly provide $25,000 to employees to help start up electronics stores in their hometowns. We wonder how many iPads a laborer would have to sell to afford one of their own.
Foxconn discussing the possibility of price hikes to offset wage increases
We'd already heard that Foxconn was looking to recoup some of the additional costs spurred on by wage increases by moving some production to Vietnam or Taiwan (as well as to a new facility in China's Henan province), and it now looks like the company might be taking some additional measures as well. According to The Wall Street Journal, Foxconn (also known as Hon Hai) says it will discuss the "possibility" of raising product prices with its clients to further offset the wage increases -- which, of course, were prompted by the recent spate of suicides at the manufacturing giant, and are set to go into effect this October. Details on those potential price increases are still light beyond that, however, with Foxconn only saying that they would "vary depending on the client and product."
Chinese government to make Foxconn suicide findings public
We've been struggling to wrap our heads 'round this whole Foxconn imbroglio since the beginning, and while we're pretty skeptical about any official reports we'd be remiss if we didn't mention that the Human Resources and Social Security Ministry in China was looking into the thing, and that they'll be releasing the findings somewhat soonish. According to Vice Minister Zhang Xiaojian, recent strikes at various factories including Brother and Honda (strikes seemingly sparked by the Foxconn incidents) do not constitute "a 'wave' of unrest." Well, that's good -- for business owners, at least. And while the families of the Foxconn suicides maintain that long hours, low pay, and harsh management are to be blamed, Zhang added that "the psychological problems of the workers" can be added to the list. Psychological problems caused by low pay, long hours, and harsh management, perhaps? [Thanks, Xinh]
Foxconn axes suicide compensation, relocating some production to Vietnam or Taiwan
At yesterday's annual shareholder meeting, Foxconn revealed that it'll no longer be compensating families of dead employees as a move to discourage further suicides. CEO Terry Gou reasoned by exhibiting evidence that showed the money -- an amount almost equivalent to ten years' worth of salary -- was a major motivation for the suicides. One such exhibit was a man's suicide letter that contained the following message for his parents: "...now I'm going to jump off Foxconn, really leaving now, but you don't have to be sad, because Foxconn will pay a bit of money, this is all your son can repay you now." Gou also blamed a possible "Werther Effect" created by the news coverage, which might have led to six of the twelve suicides all taking place in May. Consequently, the company will be handing over its welfare management work to the local Chinese government, as it's unable to deal with too many social responsibilities. In the same meeting, the company made an unsurprising announcement that it's looking to relocate some manufacturing work, amid a worsened earnings forecast due to increased wages -- basic salary has gone up from ¥900 ($132) to ¥1,200 ($176), rising to as much as ¥2,000 ($293) for those who meet new performance criteria. This will involve setting up a fully automated facility in either Taiwan or Vietnam, while the existing Vietnamese plant will be receiving more orders. Chairman Samuel Chen also said that Foxconn will be working with its clients to share the load -- no further details on this, but we suspect Apple's rumored direct subsidies are part of the plan.
Rising labor costs in China may lead to pricier electronics, manufacturing relocation
You might recall that Foxconn, faced with the searing spotlight of the world's attention on its working conditions, recently announced not one but two wage increases for its employees, which is now looking like part of a larger trend in China toward higher pay. The city of Beijing has said it'll be raising its minimum wage by 20 percent, to 960 Yuan ($140) a month, and is expected to be followed by others. The New York Times pins this on numerous factors, including growing competition for workers, state authorities insisting on higher standards, and a national policy effort to ease the gap between rich and poor. All good news, you might think, but these worker-friendly measures are taking their toll on manufacturing costs, and now there's talk of companies relocating production to cheaper locales. Vietnam, India and Indonesia are the prime suspects for taking production duties away from China, with some companies also apparently contemplating shifting to poorer regions within the nation. These changes are unlikely to perturb high-end electronics manufacturing in the short term, due to its more sophisticated infrastructure and supply chain, but the end consumer might still feel their effect in the form of higher prices. Inflation within China and a projected increase in its currency value are likely to drive up the cost of exports, so we'd advise buying what you need sooner rather than later. [Thanks, Daniel]
Foxconn offers additional 66 percent raise, pending mysterious performance review
Though working conditions at Hon Hai Precision Industry may or may not have improved since Foxconn CEO Terry Gou showed off the pool, pay most certainly has. Where workers once made 900 yuan (about $132) per month, Reuters reports that should workers pass a three-month review, they could pull in 2,000 yuan ($293) in the same period. However, Foxconn's not saying what would qualify an individual for the review. Even should they not pass, wages will be 30 percent higher than before the company's labor scandals were brought to light, and before a string of twelve laborers reportedly committed suicide.
Foxconn increases wages by 30 percent as deaths continue to mount
According to Reuters, Foxconn will be raising worker wages an additional 10% from the original 20% raise announced last week. Foxconn spokesman, Arthur Huang, said that the 30% base wage increase takes effect immediately. Foxconn admits that it hopes to earn the respect of its workers and raise efficiency with the pay increase while offsetting rising costs on the Chinese mainland. The company's shares fell by 2% following the announcement (in a market down just 0.4%, relatively), worried perhaps that the raise would erode operating profits. All this comes as more Foxconn deaths -- now at 12 -- are being reported. Family of Yan Li, a Foxconn engineer, claims that their son died of exhaustion after working non-stop for 34-hours, then returning for another 12-hours after a 10-hour break. Police have already ruled out suicide and homicide in the case. Nevertheless, Yan Li's family is demanding 250,000 yuan (about 25 times the worker's annual base salary) in compensation. Foxconn accepts no responsibility in the matter saying it would only pay out "humanitarian terms" to the family.
Apple rumored to begin paying Foxconn employees direct wages
Chinese website Zol -- which is owned by CBS Interactive -- is reporting that Apple may be moving toward a model of paying Foxconn employees direct subsidies, in the form of small percentages of the profits from whatever product line they work on. It's also interesting to note that the report claims that Apple has looked into the situation, and found that the general unhappiness of the workers and the recent spate of suicides could be attributed to low wages. The report says that Apple -- which apparently pays Foxconn 2.3 percent of the final retail price for a given product -- will pay an additional amount directly to the workers, which would give a significant boost to the roughly $132 they're currently pulling in per month. The actual payout numbers we're hearing -- around 1 to 2 percent of a retail price of the products manufactured -- don't exactly make sense so we're hoping to get clarification as to the breakdown if the rumor turns out to be true. The report also states that the iPad production line will be the first to benefit from the scheme. We have asked Apple for comment and will update if and when we hear back.
Top Chinese official calls for improved worker conditions in response to Foxconn deaths
The highest ranking official in the Guangdong province of China has called for improved conditions for workers in light of the recent slew of suicides at Hon Hai Precision Manufacturing, also known as Foxconn. Wang Yang, the provincial party secretary in the province where the suicides have taken place, said that the government must work together with the company to "take effective measures to prevent similar tragedies from happening again," While it's still not clear what is causing the deaths, Wang called for measures such as increasing sports and leisure activities for the workers, and improving communication between worker and employer. "Labor unions in private firms should be improved to facilitate better working conditions and more harmonious relations between workers and employers," he said, speaking at a conference in Shenzhen on Saturday, just about one day after Foxconn announced it would increase wages of workers up to 20 percent.
Foxconn raising wages, relocating 20 percent of Shenzhen workers closer to home (updated)
After a string of highly localized suicides at Foxconn's manufacturing campus captured the world's attention -- again -- the company has decided to increase worker wages by about 20 percent. Foxconn says that the pay raise had been planned for some time but did not say when it would be implemented. Mind you, a 20% bump in the third quarter is not unusual as Foxconn ramps up production for the holidays. In fact, Foxconn has given raises by as much as 50% in the past according to Vincent Chen, analyst at Yuanta Securities in Taipei. At the moment, Foxconn entry-level line workers are paid 900 yuan (about $131.80) per month -- remuneration that exceeds the local minimum wage in the area. And that's before bonuses and that oh-so tempting overtime pay are factored in. It's also worth noting that Foxconn is said by a factory worker surnamed Wang, to pay 100,000 yuan (about 10 times a worker's annual base salary) to families of suicide victims -- a sum he says has tempted some to their death. Update: CEO Terry Guo is being quoted as saying that Foxconn plans to relocate some facilities and about a fifth of its Shenzhen workforce (that's about 80,000 people based on the 400k estimates tossed around) to western parts of China so that the workers can be closer to their families. Meanwhile, Sony, Nokia, and Nintendo, all Foxconn customers, have joined Apple, Dell, and HP in expressing their public concern over the working conditions in Foxconn.
Another Foxconn employee commits suicide
Another Foxconn employee has committed suicide within the last few hours, several Chinese news sources are reporting. So far, we know that the employee was male, and that he died at the Longhua factory but no other details have been made available as of yet. This latest death comes just hours after the news that Foxconn employees were very recently asked to sign a letter saying that the company would pay no more than legal minimum wage for "injuries sustained outside the workplace." The letter, which was made public early this morning, caused Chairman of Hon Hai to say they were "taking it back" as the language was inappropriate. Foxconn, AKA Hon Hai Precision -- a massive Taiwan-based company with huge factories in China -- is responsible for manufacturing electronics for several major US companies, namely Apple, Dell, and HP. All three released statements about the state of affairs earlier today that essentially boil down to "we're looking into it." [Thanks, MakeChoice]
Apple, Dell, and HP comment on suicides as Foxconn CEO shows off the pool
On an 84-degree day (29 C) at a Chinese factory housing some 400,000 workers, at least 2 of them were enjoying the Foxconn swimming pool. We know this because the notoriously secretive Foxconn CEO, Terry Gou, was showing off some of the workers' facilities to the press to assure the world that he was not operating a sweatshop. Foxconn has received a great deal of attention lately after a rash of suicide attempts this year left 2 workers seriously injured and 9 people dead. While these numbers are relatively low compared to World Health Organization data showing a suicide rate of about 14 deaths per 100,000 Chinese, Foxconn contends that there were only one or two suicides a year previously at its Shenzhen factories. Today Gou announced that Foxconn has 70 psychiatrists and 100 voluntary workers trained to help prevent suicide. Great, problem solved. As you probably know, Foxconn is behind the assembly of many major consumer electronics brands including HP, Nokia, Dell, and Apple -- the latter two have come out with statements expressing their respective concern. Apple had this to say: "We are saddened and upset by the recent suicides at Foxconn. We're in direct contact with Foxconn senior management and we believe they are taking this matter very seriously. A team from Apple is independently evaluating the steps they are taking to address these tragic events and we will continue our ongoing inspections of the facilities where our products are made." And Dell this: "We expect our suppliers to employ the same high standards we do in our own facilities. We enforce these standards through a variety of tools, including the Electronics Industry code of conduct, business reviews with suppliers, self-assessments and audits." During today's press event, Tang Wenying, a young Foxconn line supervisor said, "This is a good place to work because they treat us better than many (other) Chinese factories." And that may be the most worrisome aspect of this: Foxconn, by all accounts, provides some of the best conditions for the Chinese workers it employs. What does that say about the anonymous (and thus, invisible) chain of small suppliers and secondary assembly facilities nobody reads about? Update: HP says that it is also investigating "the Foxconn practices that may be associated with these tragic events."
Nintendo Wiimote RVL-036 mysteriously clears the FCC
We can't say for sure what's new here but that wireframe outline is most definitely a Wiimote. The Nintendo-branded Bluetooth device just passed through the FCC courtesy of Hon Hai Precision, aka Foxconn. There's very little in the way of detail here other than a new RVL-036 model number reminiscent of the console's "revolution" roots. Perhaps the new Wiimote finally integrates the MotionPlus add-on? Who knows, but it certainly makes sense given Miyamoto's recent comments. At least we can be certain that it's exactly 12 times better than the model RVL-003 Wiimote shipping today. Another FCC document grab after the break.
The fate of a generation of workers: Foxconn undercover fully translated (update: videos added)
Machine translations are still years or even decades away from perfection, so rather than sending you to an auto-translated page, we now present -- with exclusive permission from Southern Weekend -- a human translation of this damning article on Foxconn by undercover reporter Liu Zhiyi. (Photo: Southern Weekend) I know of two groups of young people. One group consists of university students like myself, who live in ivory towers and kept company by libraries and lake views. The other group works alongside steel machineries and large containers, all inside a factory of high-precision manufacturing environment. These guys always address their seniors as "laoban" (boss), and call their own colleagues -- regardless of familiarity -- the rude "diaomao" (pubic hair) in loud. After going undercover in Foxconn for 28 days, I came back out. I've been trying to tie the two pictures together. But it's very difficult. Even with people living in these two places sharing the same age, the same youth dream. My undercover was part of Southern Weekend's investigation on the then six Foxconn suicides. We soon found out that most of Southern Weekend's reporters were rejected due to age -- Foxconn only recruits people around the age of 20. In comparison, being just under 23 years old, I was quickly brought into Foxconn. The 28-day undercover work made a strong impact on me. It wasn't about finding out what they died for, but rather to learn how they lived.
Undercover Chinese reporter exposes Foxconn working conditions (update: full English translation)
Some time in April, Chinese news site Southern Weekend sent its intern, Liu Zhiyi, on a 28-day undercover mission at Foxconn's Shenzhen factory, as part of an investigation on what could've led to this year's numerous suicides in one of China's largest factories. While the report doesn't comment on the company's management and support networks (or the lack of) for front-line workers, it appears that the real problem lies in Chinese workers' definition of a "good factory" -- one that pays more by means of offering overtime hours. It's clear what's causing this perception -- there's the sub-standard minimum wage in Shenzhen, and then there are the companies abusing this fact to lure workers with overtime hours above the legal limit. Update: Thanks to Southern Weekend's exclusive permission, we've now published the full human translation of the Chinese report.
Five Foxconn workers attempt suicide in last month, are we the cause?
Whether you know it or not, the people employed by Foxconn, aka, Hon Hai Precision Industry Co., have more than likely built something in your home. In fact, the computer or smartphone that you're using -- be it from Apple (yes, the iPad too), Nokia, HP or Dell -- to read these words was probably assembled by the hands of Foxconn workers; remote villagers that dedicate a few years of their lives (and typically 12 hours per day) to Foxconn's manufacturing cities. In return, Foxconn pays a relatively competitive wage that enables its workers to support distant relatives or eventually return to their interior province to purchase land or open up a local shop. So it's a bit startling to hear that five (5!) Foxconn workers at its Longhua plant have attempted suicide since March 11th; a facility that employs, feeds, and houses an estimated 300,000 workers. This is especially disturbing after the much publicized suicide of a Foxconn employee supposedly entrusted with an iPhone prototype. Is our obsession with cheap gadgets from a consumer electronics industry preoccupied with secrecy, profit, and speed, creating the conditions where -- for some -- suicide is the only escape?
WSJ: Apple 'developing new iPhone,' plus another for Verizon (update: iPhone HD, front-facing camera?)
You heard right, folks -- according to the Wall Street Journal, Apple is currently "developing a new iPhone to debut this summer," and as if that weren't enough, it's also "working on another model for US mobile phone operator Verizon Wireless." As of this moment, details about the break are nowhere to be found, but it's not like either tidbit is shocking. This summer will mark the one-year anniversary of the iPhone 3GS, and if the Cupertino-based company keeps with its historical refresh pattern, we're just a few months out from seeing the latest and greatest iPhone. There's also been no shortage of iPhone-to-Verizon rumors over the years, with the latest of 'em happening during the run-up to the iPad's launch. Update: We're now learning that the "next iPhone is being manufactured by Taiwanese contract manufacturer Hon Hai Precision Industry," which just so happens to be the same outfit responsible for crafting all prior iPhones. That's according to "people briefed on the matter" and sourced by the WSJ. It's also stated that the world's first CDMA iPhone will be manufactured by Pegatron Technology, which we caught just last week dabbling in some of NVIDIA's Tegra 2-based wares. If all goes well, Pegatron could begin mass production of the CDMA iPhone (exact model not disclosed) this September, so it's hard to say if Sprint or Verizon would have access before the all-too-lucrative holiday season. As for quotes on the matter? Most everyone involved wouldn't say a word, but an AT&T spokesman did utter the following: "There has been lots of incorrect speculation on CDMA iPhones for a long time. We haven't seen one yet and only Apple knows when that might occur." On a week that couldn't possibly get any bigger for Apple, that's exactly what just happened. Everyone suspected that a fourth-generation iPhone was in the works, but having an outlet like the WSJ confirm it just makes the summer that much harder to wait for. There's also the possibility that 2010 will be the final year that AT&T retains its death-grip on the iPhone, but by the sound of this report, it still seems as if the nation's largest GSM carrier may nab exclusive rights on the latest iPhone. We also can't help but wonder about the future of a true 4G iPhone -- will Sprint manage to grab a WiMAX-enabled version? Will Verizon get its grubby paws on an LTE model? We figured only Jobs would know, but now... there might just be someone else out there willing to spill the beans. Update 2: Soon after the news broke, we were informed that the next-generation iPhone would be announced on June 22nd (a Tuesday, naturally) and would be dubbed the iPhone HD (a name that has been tossed around before). That certainly makes sense given that Apple almost certainly has to up the pixel count in order to rival the EVO 4G, HD2 and all of those other high-res handsets, but we're still reserving judgment until we see that fateful media invite hit our inbox. Update 3: John Gruber's just weighed in with some more tidbits, in his characteristically polite way. Gruber says the next model will have an A4-class SoC, a 960 x 640 display, a front-facing camera, and that iPhone OS 4.0 will enable third-party multitasking. A pretty safe set of predictions, in all, but Gruber's done pretty well in the past, so we'll just have to wait and see. [Thanks, Chris]
Pegatron on board to make next iPhone, might do 720p video recording?
The silly little sensor in the latest-gen iPod nano might have you thinking that high-quality video recording isn't anywhere on Apple's radar, but if you look in the smartphone space, HD video is shaping up to be the next gotta-have-it feature among the world's most buzzworthy handsets -- and sure enough, we're getting some hints here that it'll be on board the next iPhone. Remember that mysterious "N89" device in the iPhone OS 3.2 SDK? We've been tipped off that a gander at the MediaValidator.plist file reveals a few telling stats: the maximum video width is up from 768 pixels to 1280, and the maximum number of pixels per frame is up to 921,600, which just happens to work out to 1280 x 720. The device's AVC profile has been bumped from 3.0 to 3.1, too, which adds in support for 720p -- so yeah, all the signs are there, and industry trends pretty much require that we expect it at this point. On a related note, DigiTimes notes that ASUS spin-off Pegatron has allegedly been picked up as an OEM for the N89 (or whatever the new iPhone's internal code happens to be) -- but it won't be alone. The indication seems to be that Foxconn will continue churning out phones for Cupertino, too, perhaps a sign that these guys are expecting the need for more capacity than the old OEM alone can deliver, or that there could be multiple generations in the retail channel (a la 3G / 3GS) at the same time. Given Apple's typical iPhone cycle, it could be a few months before we know for certain -- so go ahead and take your sweet time speculating on this round. [Thanks, Dan L.]
Analysts debate P.A. Semi's role in forthcoming Apple wares
It's easy to forget that Apple snapped up P.A. Semi for a song way back when, but now that we're just days, hours and seconds away from Apple's expected tablet reveal, a new wave of processor-related conjecture is hitting the fan. Richard Doherty, director of technology consulting firm Envisioneering Group, has come forward with some exceedingly detailed rumors on said tablet, a touchscreen MacBook and an OS X-based unicorn that lives in the cloud. As the story goes, Apple's pickup of P.A. Semi was primarily an effort to acquire a huge pool of engineering talent to use for its own internal designs, and now Doherty is saying that "before the year is out, Apple will have the most powerful, lowest-cost SoC in the industry." According to him, there's nothing from "ARM licensees or Intel that could challenge the power-per-watt, the power-per-buck, the power-per-cubic-millimeter of size," and he anticipates that four new products are in the pipeline from Cupertino. Need details? How's about a touchscreen iMac, an "iPod touch on steroids" with a 5-inch display, and "two different versions of media pads in the 7- to 9-inch (screen size) area." Alright Dick, you just put your reputation on the line -- here's hoping you've got your story straight. Update: Looks like UBS Investment Research has been hearing something similar. According to it, the forthcoming tablet "will be powered by a processor designed by P.A. Semi and built by Samsung."
Manufacturers redirecting R&D on declining GPS device orders?
If you enjoy the decimation of an industry as much as Google does then you're going to love the latest rumor sourced from DigiTimes' manufacturing moles. According to the Taiwanese rumor rag, personal navigation device R&D teams at the manufacturing powerhouses of Foxconn (aka, Hon Hai) and Wistron have been shifted to other devices in the face of "declining PND orders." Seems logical as GPS-equipped smartphones snuff out their dedicated forebears with the same converged precision that turned wrist watches into items of fashion. The strange part of this DigiTimes rumor is that said manufacturers have shifted those PND teams to focus on e-book readers and (are you ready?) MIDs. Man, if the world's largest manufacturer of consumer electronics sees MIDs as a more economically viable option than personal navigators, well, maybe things are more dire for TomTom and Garmin than originally feared.
