Hon Hai Precision, better known as Foxconn, is planning to invest $4 billion into increasing the amount of robotics and automation technology used in its factories, according to a report on Nikkei.
The business news website says Foxconn’s profits are coming under pressure because of rising labour costs.
Foxconn, a Taiwan-headquartered company with extensive operations in China and around the world, is the main contract manufacturing partner for Apple, and makes the US tech giant’s iPhones and other devices.
Nikkei says Foxconn will use “a key Chinese unit to bankroll efficiency-boosting automation investments”, which means the company will raise funds to establish a new business unit in China.
Speaking at social engagement recently, Foxconn chairman Terry Gou said: “If we can’t change, we’ll be left behind. The next three years will be decisive. Our old formula for success will be shaken up.”
Nikkei did not detail any specific investments or implementations, but Foxconn is reported to have installed more than 40,000 industrial robots so far in its processes, and claims to have the capacity to produce 10,000 robots a year.
The company is also partnering with software-oriented companies – such as Megvii – to develop new applications for its robotics and automation technology and make the processes more efficient.
This may prove crucial to the company’s bottom line as Foxconn continues to expand in India, the US and other parts of the world.
Foxconn’s ultimate aim is to replace all humans with robots, according to reports.
Nikkei says Foxconn expects to raise more than $4 billion for its new China business unit. Its reported revenue for 2016 was almost $132 billion, with a net income of $4.5 billion.