Foxconn

[Image credit: iFixit]

We covered iFixit’s Retina Display teardown this morning, but the report left out one very important detail: Who makes the display? There had been some discussion by DisplayMate’s Raymond Soneira on whether Sharp’s IGZO display technology was used:

An IGZO Retina Display? Traditional high PPI displays (with amorphous Silicon) are inefficient with both brightness and power. As a result, the new iPad 3 with a Retina Display needs a 70 percent larger battery than the non-Retina Display iPad 2, but the MacBook Pro with Retina Display has only a 23 percent larger battery with the same 7 hour running time as the non-Retina Display MacBook Pro. How can this be? You may recall that IGZO technology has been making headlines for months, first rumored to be the technology used in the Retina Display for the new iPad 3. IGZO is significantly more efficient than amorphous Silicon. It wasn’t ready in time for the new iPad 3, but Sharp announced that production of IGZO LCDs with up to 300 PPI started in March of 2012… Just in time for the MacBook Pro… These facts lead me to speculate that the MacBook Pro is using a Sharp IGZO Retina Display…

Apple, Sharp, and Foxconn are rumored to be working together on something bigger as well.

Nope…
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Reuters reported today, while citing Japanese business daily Nikkei, that Sharp will supply its technology to Hon Hai for a new Foxconn plant that will produce panels for devices like Apple’s iPhone. The move follows an investment from Foxconn’s parent company Hon Hai Precision in March, which agreed to buy 46.48-percent of Sharp’s LCD plant in Japan and $844 million in new shares for an 11 percent stake of the company.

TOKYO (Reuters) – Japan’s Sharp Corp will supply technological know-how to Taiwan’s Hon Hai Precision Industry Co for a plant in China that will produce panels for Apple Inc’s iPhone and other consumer electronics products, the Nikkei business daily said on Thursday.

As for what technology Sharp will provide, the report only specified it will be “aimed at improving quality management” at a future plant in Chengdu. Sharp will reportedly receive “tens of billions of yen in fees” through the partnership, and it announced plans today to buy back Sony Corp’s 7.04-percent stake in its Sakai, Japan-based plant.

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[tweet https://twitter.com/#!/up2secapple/status/202068480105775105]

Update May 16, 2012: German publication Handelsblatt (via Bloomberg) quoted Chief Executive Officer Oliver Seidl of German TV manufacturer Loewe as saying the company has had “no contact” with Apple regarding an acquisition.

Less than a month after posting a false claim about Apple’s CEO Tim Cook visiting the Valve HQ, ole’ Danny Dilger claimed this weekend that Apple is moving to acquire a German TV manufacturer called “Loewe.” Again, we did not run with the story, because we preferred to mock it instead via Twitter. Not only has that story been debunked, but more allegations about Foxconn’s CEO Terry Gou having confirmed an Apple television are now being denied by the company. Oh, and Digitimes’ track record…

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The ever-sketchy DigiTimes does not have the best reputation when it comes to predicting Apple product launches, but today the publication is reporting Apple OEM Pegatron began receiving orders for a new iPhone and a next-generation 10-inch iPad. It also reported Apple plans to release a 7-inch iPad in August:

Pegatron Technology reportedly has landed orders for a new-generation iPhone to be launched in September and a 10-inch iPad to be launched in the fourth quarter, according to Taiwan-based supply chain makers. Pegatron is currently an OEM for the iPhone 4S and new iPad… A 7-inch iPad, which reportedly will be released in August, will be manufactured by Foxconn Electronics (Hon Hai Precision Industry).

With the release of Apple’s new iPad last March, we find it hard to imagine Apple plans to break its yearly release window with a new 10-inch iPad, in addition to a 7-inch variant in August. We heard many rumors lately about a 7-inch or 7.85-inch tablet, indicating Apple could be experimenting with smaller screen sizes. In April, a translated report from a Chinese publication claimed Apple was prepping 7.85-inch iPad minis to launch in Q3 for $250 to $300, but we have not heard anything concrete on Apple’s plans to release a 7-inch tablet. As for iPhone, we are still expecting an October launch at this point.

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Following audits and a major overhaul of workers’ rights at Foxconn factories in China, a report from newspaper Jornal de Jundiai (via Evertiq) claimed 2,500 workers at a Foxconn plant in Jundiai, Brazil are threatening to strike if the company does not meet their demands by May 3. The plant in Jundiai is currently responsible for the assembly of some of Apple’s iPhone 4 and iPad 2 units:

Newspaper Jornal de Jundiai reports that workers at the plant will strike if issues surrounding severe water shortages, food, and transportation of employees are not resolved… In a statement the United Steelworkers of Jundiaí and Region said workers decided to give 10 days (from the Monday) for the company to resolve the issues raised in a meeting on Monday… According to the report by Jornal de Jundiai, a spokesman from the union said that lack of water as well as poor quality food was an issue for workers. As the number of employees at the plant grows, workers also complain that the infrastructure for transport has remained the same size, causing overcrowding in buses.
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According to a report from The Oregonian, power amplifier specialists TriQuint Semiconductor is facing a “challenging” quarter due to a temporary drop in revenues from its biggest customer, Apple. The report noted the company’s CEO Ralph Quinsey did not mention Apple by name, but that Foxconn was responsible for 35 percent of TriQuint’s revenue during 2011:

TriQuint said sales in the current quarter will fall at least 19 percent to the lowest point in at least two years… While Quinsey wasn’t specific about where the problem lies, Apple has incorporated TriQuint chips in the last several generations of the iPhone. Apple is approaching its annual iPhone upgrade — the last upgrade took place in October — and sales tend to fall off before new products launch.

We know from teardowns that Apple included TriQuint chips in many generations of the iPhone and iPad, including the most recent iPhone 4S and third-generation iPad. When iPhone component supplier Qualcomm announced last week it was having “trouble meeting demand” for LTE chips likely to end up in a next-gen iPhone, many analysts speculated that was a clear indication of an October iPhone launch.

Quinsey said in a statement to the publication that he expects to return to normal revenue and growth numbers in the second half of this year:

“I believe this dip will be temporary and remain confident about our long term position,” Quinsey said in a written statement. “We have achieved design win success with our new products and I believe we will return to normal revenue levels and growth in the second half of 2012.”

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http://www.youtube.com/watch?feature=player_embedded&v=5cL60TYY8oQ

Marketplace reporter Rob Schmitz is the second reporter ever to get an inside look at Foxconn, the manufacturing plant where Apple’s products are made. Today, Schmitz posted a video showing our first-ever look at the assembly process of an iPad as it goes down the assembly line at the Foxconn plant in Shanghai, China. It is interesting to look at how machines streamline some of the process. Schmitz also noted a few other interesting points, such as workers switching positions every few days while making $14 a day when first starting.

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A Japanese TV crew approached a booth at the Foxconn plant in the suburbs of Taiyuan in Shanxi Province and asked a woman manning the booth about the 18,000 people Foxconn is recruiting for the next iPhone (video here at 7:10 via Macotakara). She said something about “being built for June.”

That plant is hiring many workers (and facing strikes from current workers) for iPhone production, according to local reports.

While she seems to imply that Foxconn is ramping up for a June production or release (or it may not), we are not convinced this is a credible source with knowledge of Apple’s plans.

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[youtube=http://www.youtube.com/watch?feature=player_embedded&v=E5odytJoYmo#!]

The results of the Fair Labor Association’s investigation into Apple’s suppliers beginning with three Foxconn facilities officially published yesterday. While finding excessive working hours and many violations of Chinese labor law, Foxconn and Apple agreed to reduce workweek and overtime hours within Chinese law to 49 hours per week and 36 overtime hours per month based on the FLA’s recommendations. Foxconn will also hire tens of thousands of new employees and implement a compensation package to make sure workers’ salaries remain the same amid reduced working hours.

In the interview above with Reuters, head of the FLA Auret van Heerden talked about the investigation and noted the agreement could set a new standard for working conditions throughout China. One unanswered question is whether the agreement will lead to higher prices for consumers (which is not necessarily a bad thing)…

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We knew the Fair Labor Association would publish the initial findings of its investigation into Apple’s Foxconn facilities, and now the report is officially available through the organization’s website. The full report released today and is here. The press release outlining the investigation is below. According to the recommendations, Foxconn committed to “bring its factories into full compliance with Chinese legal limits and FLA standards on working hours by July 2013.”

The last we heard from the FLA about its audits into Apple’s Foxconn facilities was that it found “tons of issues.” Apple became the first technology company accepted as a member into the organization after controversies surrounding working conditions in Apple’s supply chains abroad became mainstream. As for what the FLA found in its audits of the three Foxconn facilities, here is an excerpt from the report:

FLA’s investigation found that within the last 12 months, all three factories exceeded both the FLA Code standard of 60 hours per week (regular plus overtime) and the Chinese legal limits of 40 hours per week and 36 hours maximum overtime per month. During peak production periods, the average number of hours worked per week exceeded 60 hours per worker. There were periods in which some employees worked more than seven days in a row without the required 24 hours off.

The FLA said Foxconn’s commitment will “reduce working hours to legal limits while protecting pay, improve health and safety conditions, establish a genuine voice for workers, and will monitor on an ongoing basis to verify compliance.” This will lead to a maximum 49-hour workweek, including overtime for employees and a decrease in monthly overtime from 80 hours to 36 hours. While we reported some workers were unhappy with working fewer hours, Foxconn also committed to a compensation package for workers with reduced overtime:

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With all the controversy surrounding Apple’s supply chains abroad, Foxconn, one of Apple’s biggest partners responsible for assembling the majority of its products, has received the brunt of criticisms. We already know what the Taipei-based assembler thought about Mike Daisey’s fabrications of working conditions at Foxconn plants, but today we get another first hand account from an actual Foxconn employee.

A report from China Business News (via MIC Gadget) profiled Foxconn worker and iPad assembler Wang Xiaoqiao (who opted to hide his real name). According to Wang, iPad line workers are beginning to work fewer hours and get more days off as supply meets demand. Wang said iPad production was ramped up in March, bringing assembly time from 10 hours a day down to 8 hours. However, he is not happy about working less. Wang explained:

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[youtube=http://www.youtube.com/watch?v=SnO5eZt0EXo]

Foxconn seems to be happy about the news late last week that Mike Daisy’s monologue about his Foxconn ‘findings’ was mostly fabricated from news reports.

In a statement to Businessweek, Louis Woo, spokesman for Taipei-based Foxconn said:

“I am happy that the truth prevails, I am glad that Mike Daisey’s lies were exposed. But I don’t think that the reports about this have gone far enough to find out what exactly is the truth. People will have the impression that Foxconn is a bad company, so I hope they will come and find out for themselves,”

Daisey was exposed via an NPR reporter that contacted his translator Cathey Lee who denied just about every part of Daisey’s story. Daisey, for his part, responded:

I stand by my work. My show is a theatrical piece whose goal is to create a human connection between our gorgeous devices and the brutal circumstances from which they emerge. It uses a combination of fact, memoir, and dramatic license to tell its story, and I believe it does so with integrity. Certainly, the comprehensive investigations undertaken by The New York Times and a number of labor rights groups to document conditions in electronics manufacturing would seem to bear this out.

Daisey has been forced to stop his show but did receive a standing ovation following its last performance this weekend.

Critics of Foxconn say that they aren’t off the hook.

Update: Daisy has a new blog post out with this:
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A report from Bloomberg today confirmed Foxconn is interested in hiring new safety and security experts to help improve working conditions in facilities responsible for supplying Apple products. Foxconn’s retail division chairman Louis Woo confirmed the job listings, which include a “lifestyle manager” responsible for maintaining worker dorms and healthcare, a safety and security expert, and two fire chiefs:
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As the Fair Labor Association inspectors interview Foxconn employees about working conditions at iPad plants, early reports coming our way are a bit ambiguous and a tad confusing. First FLA president told Reuters that plant floors are spotless, then Bloomberg published an article claiming the organization found “tons of issues,” and finally those two video teasers (here and here) from ABC Nightline’s ‘iFactory’ documentary added ambiguity as the producers apparently “didn’t find any egregious violations.”

Knowing ABC’s parent company Disney has the Steve Jobs Trust as its largest shareholder, and considering that FLA is funded by the biggest players in the industry, including Apple who commissioned the Foxconn inspection that began last week, some watchers are speculating there must be more to this than meets the eye. Read on…

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[vodpod id=Video.16115602&w=650&h=420&fv=allowFullScreen%3Dtrue%26bgcolor%3D%23000000%26autoPlay%3Dfalse%26screensLayer.startScreenOverId%3DstartScreen%26screensLayer.startScreenId%3DstartScreen%26]
Note: A YouTube version should be up soon

As promised, ABC aired its documentary about Foxconn factories producing Apple products. In an unprecedented move, Apple decided to grant the network’s “Nightline” program full access to its Chinese supply chain, so correspondent Bill Weir traveled to Shenzhen, China to look at “iFactories,” as ABC dubbed them.

Full disclosure: Disney Corporation owns the ABC News network. The fact that the Steve Jobs Trust is Disney’s largest individual shareholder, coupled with Disney CEO Bob Iger now having a seat on Apple’s board of directors, certainly helped win the official approval from Apple. It also raises questions on a possible conflict of interest with this report.

The full “iFactory: Inside Apple” report is scheduled to air on a special edition of “Nightline” due tomorrow, Feb. 21, at 11:35pm ET/PT. A preview will air on “Good Morning America” and “World News with Diane Sawyer.” A long article that accompanies a video teaser, included above for your convenience, offers a grim description of working conditions inside Foxconn plants:

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With the Fair Labor Association audit of Apple suppliers at Foxconn City underway for several days now, the first details are starting to trickle in. The non-profit agency’s head Auret van Heerden told Reuters that working conditions at Foxconn’s iPad plant are “far better” than those at their factories elsewhere in the country. It is a personal impression and not the official stance, because 30 FLA staff members have three weeks to interview about 35,000 workers at two Foxconn plants in China.

Workers will answer questions anonymously by entering their responses with iPads. Van Heerden was also surprised, he confessed, with how “tranquil” the floor at Foxconn plant is compared with a garment factory.

I was very surprised when I walked onto the floor at Foxconn, how tranquil it is compared with a garment factory. So the problems are not the intensity and burnout and pressure-cooker environment you have in a garment factory. . It’s more a function of monotony, of boredom, of alienation perhaps.

He speculated that workers are jumping out of windows to take their life due to boredom and alienation stemming from repetitive assembly tasks:

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Apple’s contract manufacturer Pegatron Technology of Taiwan is unaware of any forthcoming labor inspections at its Asian plants because its client has not officially tipped them about labor audits, according to Chief Financial Officer Charles Lin tells to Bloomberg. Lin was reacting to yesterday’s announcement by Apple of California that the first audits in cooperation with the Fair Labor Association have started at Foxconn City in Shenzhen, China.

Pegatron Corp., a maker of Apple Inc.’s iPhones, said it hasn’t been informed of any pending inspections of factory work conditions by labor groups, a day after the U.S. company said checks would start this spring. Pegatron is aware of Apple’s corporate social responsibility policies, Charles Lin, chief financial officer of the Taipei-based company, said by telephone today. The client hasn’t informed him about any upcoming audits, Lin said.

Apple previously confirmed that audits at Pegatron and Quanta Computer, the company assembling Mac notebooks, are due this spring. The company said the results of FLA audits will be made available on its website at the end of March. In the wake of the Foxconn scandal, a month ago Apple became the first technology company admitted to the FLA. That announcement followed Apple’s release of 2012 Supplier Responsibility Report that for the first time named 156 companies currently supplying components for Apple products, which left only three percent of suppliers absent from the list.

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Following the release of Apple’s “2012 Supplier Responsibility Report,” Apple announced it would be the first technology company admitted to the Fair Labor Association. The FLA will “independently assess facilities in Apple’s supply chain,” and then publish its independent findings online. Apple announced through a press release today that the first audits have officially started with FLA President Auret van Heerden and his team beginning inspections at Foxconn City in Shenzhen. Apple CEO Tim Cook said the audits are “unprecedented in the electronics industry”:
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