As Huawei struggles to keep a foothold in Western markets amid a barrage of security concerns, it is being hailed as a potential savior for handsets assembler Foxconn. Five months ago the Taiwanese firm began laying off 50,000 workers in China, but now they are being rehired.
Foxconn, known as Hon Hai Precision Industry Company in Taiwan, faced an uncertain future after American giant Apple said earlier this year it would be cutting output of iPhones by 10% in the three months to the end of March due to fallout from the US-China trade tensions. It is estimated that Apple provides half of all revenues for Foxconn, which is the world’s leading mobile phone assembler.
Then Huawei stepped in. In the past week Foxconn has started putting on 50,000 workers at Zhengzhou in China’s Henan province, and another 20,000 in Shenzhen in anticipation of a large order from the Chinese telecommunications group. It may have come just in time.
Foxconn confirmed to Reuters that most of the additional workers will be based at the company’s Zhengzhou plant, where 20 production lines are capable of producing 100,000 iPhones a day.
The hiring drive at the Shenzhen plant came after recruitment campaigns at Foxconn’s Hengyang and Taiyuan plants in Hunan Province and its Huai’an and Kunshan plants in Jiangsu provinces. New workers are being offered monthly pay ranging from 4,000 to 5,000 yuan (US$591 to US$739), with a probation period of only one month, local media reported.
International Data Corporation estimates that Huawei last year produced 206 million handsets, a 33.6% increase from the previous year, making it the only manufacturer among the top three worldwide to record higher volumes. Samsung’s output dropped 8% to 292 million units, while production by Apple fell 3.2% to 209 million units.
Huawei Consumer Business Group chief executive Richard Yu Chengdong said Huawei planned to produce 250 million handsets this year and 300 million in 2020, when he expects it will take over Samsung’s mantle as the top smartphone manufacturer worldwide.
Slower demand by Apple has not yet shown up in Foxconn accounts. Parent company Hon Hai reported record quarterly consolidated sales of NT$1.81 trillion (US$58.71 billion) in the final three months of 2018, while consolidated sales for the entire year reached NT$5.296 trillion (US$171.66 billion), which was also a new high.