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The Rise of the Robots at Foxconn

The Rise of the Robots at Foxconn

Foxconn is said to have received the first batch of 10,000 robots, nicknamed “Foxbots,” at one of its Chinese plants last year. A rash of worker suicides and riots in factories was widely believed to be the reason why the contract-manufacturing giant, whose clients include Apple and other big names in the electronics industry, has embarked on an automation drive. While that could be true, a harsher labor environment in China may have also been another key consideration behind the strategic move.

Not many companies employ more than one million workers as the Taiwanese manufacturer does. But if you think Foxconn is a rare exception that has a work force issue, think again. As a matter of fact, many small- and medium-sized enterprises (SMEs) are also not immune to the tightening labor market and rising wages in China.

A leading gift products maker, for instance, said it has become increasingly hard to find workers for his plant located in Guangdong province. Amid Beijing’s policy to boost wages and stimulate domestic demand, as well as a push for production upgrade, a larger wage bill is almost a given for Chinese factories.

Amid such developments, some observers are beginning to predict the rise of robots in China. In the next ten years, robot-making business in the mainland can grow to a size of $48.25 billion, a China Securities Journal report quoted an industry analyst as saying.

Entrepreneurs are not wasting any time in catching this potential big wave. Nanjing Panda Electronics raised capital for investing in several projects, including automation devices. Harbin Boshi Automation is another active player. Hunan Corun New Energy was also said to be teaming up with US-based iRobot.

Perhaps in the not-so-distant future, China will not only be the world’s most populous country, but also the nation that boasts the largest number of robots. The people chasing the robot boom are reportedly looking to buy the latest technology from overseas as the foundation to build their own models.

News of rising wages, labor shortage, or labor disputes can easily boost the share prices of robotics-related players.

Copyright (C) 2013 LexisNexis, a division of Reed Elsevier Inc. All Rights Reserved. 

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