Foxconn faces 200,000 worker shortage prior to iPhone 13 launch in September
Published: Aug 27, 2021 09:33 PM
Workers at a production workshop of Foxconn's technology park in Zhengzhou, Central China's Henan Province on July 24, 2021. The park is a major global smartphone manufacturing base. Photo: VCG

Workers at a production workshop of Foxconn's technology park in Zhengzhou, Central China's Henan Province on July 24, 2021. The park is a major global smartphone manufacturing base. Photo: VCG

Foxconn's Zhengzhou factory in Central China's Henan Province, which manufactures half of the iPhones in the world, has been facing a labor shortage of up to 200,000 workers

just weeks before the new iPhone 13's launch in mid-September, the Global Times learned. 

Industry observers said that the biggest-ever gap for assembling workers is a result of both production backlog to the Chinese mainland as Foxconn's manufacturing bases in Southeast Asia (SEA) were shut down amid the coronavirus outbreak and the demand for Apple gadgets. Since it is very hard to fill the vacancy in a short time, it is likely that the new series of iPhones could face delays in shipment.  

It comes as Wang Xue, a deputy general manager of Foxconn plants in Zhengzhou, said in a recent interview that the company's Zhengzhou plant needs about 200,000 new workers in order to meet the production needs before the end of September. That is compared with the usual peak demand for several thousands of workers prior to an iPhone launch. 

The new round of mass recruitment would be an indication of a further expansion in production for the new products, an industry insider said.

The Zhengzhou factory currently accommodates 350,000 assembly workers and can produce up to 500,000 smart phones a day, according to media reports. 

In addition to the Zhengzhou plant, those in South China's Shenzhen and Southwest China's Chengdu are also in urgent need of workers, in particular for the iPhone 13 production line. 

"We were told to recruit around 5,000 new workers on a weekly basis, but it's difficult to fully meet this target at the moment," a manager with the plant in Shenzhen said on Friday.

In order to draw more workers, Foxconn plants are raising one-time bonuses for new candidates from around 9,800 yuan ($1,511) in July to over 10,000 if they work for up to 90 days, another hiring manager in Zhengzhou told the Global Times on condition of anonymity.

The labor shortage was mainly caused by the outbreaks, which disrupted supply chains in Southeast Asia, including Vietnam, Ma Jihua, a veteran industry analyst, told the Global Times on Friday.

Industry insiders estimated that Foxconn has transferred manufacturing ability equivalent to at least 100,000 employees to other countries and regions such as Vietnam, as part of efforts to reduce labor costs. 

However, the suspension of factories in Vietnam amid the new round of epidemic since April has led to the supply chain backflow to the mainland, Luffy Lin, chief analyst at Witdisplay, an electronics device consulting platform, told the Global Times on Friday, a trend that has further ignited the labor shortage.

Relevant data shows that in 2020, there were 810,000 workers in the 27 Foxconn factories nationwide. This year, this number will probably break the record.

Another indication behind the mass recruitment is the higher expectation for shipments of new iPhones this year, which according to Ming-Chi Kuo, an Apple analyst at TF International Securities, will reach 88 million units, which is higher than the 75 million iPhone12 units in 2020.

But the industry analysts do not believe the company could get enough workers in a short time, since "what they couldn't accomplish in a few months was even more impossible to accomplish in a few weeks."

That will mean a possible hit on shipments of the new products. Both Ma and Lin could not predict the drop in shipments.

The desire to churn out more products also reflects Apple's confidence in the demand as the US crackdown against Huawei, which drains its high-end smartphone business, has eliminated Apple's potential competitors.

"Given the rising costs and the lack of competitors, the potential market price for iPhone 13 could rise by at least 10 percent. But despite the higher price, given the huge potential demand, it may still break sales records in China," Ma predicted.