Foxconn China is "thirsty" for workers, wages have increased to a record

Current Labor Shortage Situation

In just a few weeks, the iPhone 13 will be officially launched, but Foxconn factories in China - which produce half of the iPhones worldwide - are still struggling with a labor shortage.

According to the Global Times, Foxconn's factories in Zhengzhou, Hubei Province, in central China, where half of the world's iPhones are manufactured, are facing a labor shortage of up to 200,000 workers. Meanwhile, the iPhone 13 is scheduled to be released in mid-September.

Industry observers believe that the significant shortage of assembly line workers is due to production backlog in China, as Foxconn's manufacturing facilities in Southeast Asia have been closed due to outbreaks of the pandemic, while the demand for Apple devices has increased. This situation is difficult to resolve in the short term, so there is a high possibility that the new iPhones will experience delays in delivery.

Record Salary Increase to Recruit Workers

According to the Global Times, Foxconn's factories in Zhengzhou have recently announced a new recruitment drive to hire 200,000 workers, offering a record-high bonus. This is considered the largest recruitment drive to date since the start of the pandemic, just a few weeks before the launch of the new iPhone in September.

Mr. Wang Xue, Deputy General Manager of the Foxconn factory in Zhengzhou, stated that the factory currently needs an additional 200,000 new workers to meet production demands by the end of September. An industry insider added that the upcoming wave of recruitment is a sign that the factory will further increase production of new products.

The Zhengzhou factory currently has a capacity of 350,000 assembly line workers and is capable of producing up to 500,000 smartphones per day, according to media reports.

In addition to the Zhengzhou factory, factories in Shenzhen and Chengdu in southwestern China are also in urgent need of labor, especially for the production lines of the iPhone 13.

"Every week, we are required to recruit about 5,000 new workers, but it is very difficult to achieve this target at the moment," said a manager at the Shenzhen factory.

To attract more workers, Foxconn factories are increasing the one-time bonus for new candidates from around 9,800 Chinese yuan (1,511 USD) in July to over 10,000 Chinese yuan if they work for 90 days, according to an anonymous recruitment director in Zhengzhou interviewed by the Global Times.

Possibility of Delayed Delivery and Price Increase for iPhones

Mr. Ma Jihua, a seasoned industry analyst, stated that the labor shortage is primarily due to the outbreak of the pandemic, which has disrupted the supply chain in Southeast Asia, including Vietnam.

Industry insiders estimate that Foxconn has shifted some production stages, equivalent to at least 100,000 workers, to other countries like Vietnam as part of their efforts to reduce labor costs.

However, the factories in Vietnam have also temporarily ceased production due to the April outbreak, causing the supply chain to flow backward and exacerbating the labor shortage in China, according to Luffy Lin, the chief analyst at Witdisplay, an electronics consulting platform.

According to the Global Times, in 2020, Foxconn had approximately 810,000 workers across 27 factories in China. This number is expected to reach a new record high this year.

Another indication behind the mass recruitment is the higher expectations for the shipments of new iPhones this year. According to Ming-Chi Kuo, an analyst at TF International Securities specializing in Apple, it is projected that the iPhone 13 will reach 88 million units, surpassing the 75 million units of iPhone 12 in 2020.

However, analysts believe that Foxconn may struggle to secure enough workforce within a short period of time, as "what they can't accomplish in a few months, they can't accomplish in just a few weeks."

This suggests that the shipments of the new iPhones may be affected.

"With increased costs and a lack of competitive rivals, the price of the iPhone 13 may increase by at least 10%," predicted Mr. Ma.

(According to the Global Times/Dân Trí)