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Foxconn invests another $1.5 billion in robot development

by on25 April 2017

Initiates stock swap to ease robot procurement for its business units

Foxconn Electronics, the world’s largest contract manufacturer, has announced an ambitious effort to push ahead with a highly automated workforce by increasing investment in its robot development subsidiary in Shenzhen, China.

Earlier in January, we reported that Foxconn has begun automating its workforce over three testing phases, with a benchmark of 30 percent automation at its Chinese factories by 2020. Now, the Taiwan-based contract manufacturer has announced an increase in robot-related research and development by ¥10.39 billion ($1.51 billion). Since September 2014, more than 500 factories across Dongguan and Guangdong have invested over $630 million in robots as employees have been retrained to focus on higher “value-added elements” in the manufacturing process.

Foxconn subsidiary Robot Holding gets massive share reduction

In order to have more of its subsidiaries involved in the development of robotic products, Foxconn has also begun a stock swap program among its subsidiaries in Hong Kong and China. The company seeks to reduce the holding value of Hong Kong-based subsidiary Robot Holding to just 0.63 percent from its current 75 percent share, while affiliate companies in China will receive Robot Holding’s shares through a stock exchange process.

Industry sources say the stock swaps will help different business units within Foxconn to adopt related robotic products and applications. Foxconn’s estimate on the value of stock swaps is expected to be around ¥23.875 billion ($3.47 billion), according to company officials.

In the past, Foxconn insisted that it was only applying robotics and other innovative manufacturing technologies to replace repetitive tasks done by employees. These include small tasks such as applying glue between components, tightening screws, placing double-sided tape, or loading products onto a pallet. Sources within the company have also suggested that it expects to maintain a “significant workforce in China,” despite long-term job losses. But Foxconn isn’t alone in the automation process.

Last year, China’s Guangdong and Zhejiang provinces announced they would spend a combined $270 billion over the next five years to equip factories with industrial robots. Support will arrive in the form of subsidies for factories who want to add more robots, along with the national government’s plan to triple industrial robot production to 100,000 by 2020.

Last modified on 25 April 2017
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