A worker on Foxconn’s iPhone production line (not involved in the theft)
A former senior manager at Foxconn has been charged with stealing and selling 5,700 iPhones for a total of around $1.5M, reports AsiaOne.
The Taiwanese manager, identified by his family name Tsai, worked in the testing department and instructed eight employees at Foxconn’s factory in the southern mainland Chinese city of Shenzhen to smuggle out about thousands of iPhone5 and iPhone5s, prosecutors said.
While you have to wonder what kind of security would allow thefts on such a massive scale to go initially undetected, the piece does contain one clue …
Apple is said to be seeking more information on the deaths of two workers from Foxconn’s iPhone assembly line in Zhengzhou, China. The WSJ reports that one death was an apparent suicide, the other an accident.
iPhone assembler Foxconn has reported a 31% drop in its Q2 net profit, a hit being attributed to the recent decline in iPhone sales. The company reported net profits of NT$17.7B ($566) against analyst expectations of NT$23.9B, reports the WSJ.
There was some good news for the company, however, as its acquisition of Sharp got the government approval necessary to make the deal fully official.
The impact on suppliers of reduced iPhone demand was first seen back in May, when it was reported that Foxconn, Pegatron, Sharp, Japan Display and Sony had all seen their fortunes falling. The impact on one supplier in particular has worsened dramatically … Expand Expanding Close
A Digitimes report claims that Apple suppliers are facing pressure from Apple to reduce costs, with major players like Foxconn and Pegatron affected. Apple is in some cases adding suppliers into the mix to help drive down pricing. It was recently reported that Sharp was gearing up to compete with Samsung and LG for the OLED displays Apple is expected to use for future iPhones.
Currently, Largan is facing strong competition from Japan-based Kantatsu over camera module orders, while Foxconn and Pegatron are seeing Apple adding new ODM partners such as Wistron for the production of its new iPhone.
Taiwan’s printed circuit board (PCB) players are also competing aggressively over Apple’s orders by cutting prices.
A major British supplier has also just posted the largest loss in its history …
With Apple expected to switch to OLED screens for future iPhones, it appears that it may not need to rely completely on the two major manufacturers for long. While Samsung and LG currently manufacture most of the world’s OLED screens between them, Nikkei reports that Sharp expects to be doing the same ‘before 2018’ …
The South China Morning Post reports that iPhone maker Foxconn has replaced more than half of its workforce with robots since the launch of the iPhone 6. The figures were provided by the local government in Kunshan, where the company is based.
“The Foxconn factory has reduced its employee strength from 110,000 to 50,000, thanks to the introduction of robots. It has tasted success in reduction of labour costs,” said the department’s head Xu Yulian …
Sharp CEO Kozo Takahashi is stepping down (Photo: European Press Photo Agency)
Following the on-off-on-againacquisition of display-maker Sharp by Foxconn, the company has announced that 12 of the 13 board members – including CEO Kozo Takahashi – will step down once the takeover process is complete. The WSJ reports that the announcement follows deepening losses at the company.
Apple’s decline in iPhone sales is unsurprisingly having a knock-on effect on its key suppliers, with the WSJ reporting that Foxconn, Pegatron, Sharp, Japan Display and Sony have all reported falling profits or losses as a result.
According to a new report from The Economic Times of India, Apple supplier Foxconn is close to signing a deal with the Indian government to open an iPhone manufacturing plant in the country. The report claims that Apple and Foxconn have narrowed the location for the factory down to Maharashtra.
Over the weekend, Bloomberg posted an exclusive report of Pegatron’s iPhone plant in China. Although Foxconn is Apple’s primary assembler, Apple has moved more of its iPhone assembly contracts to Pegatron in recent years to diversify its supply chain.
The Bloomberg report describes how the factory is managing its workforce, tracking hours via automated systems, and tackling labor issues like overtime. This is the first time Pegatron has allowed official press to photograph the insides of the factory, where 50,000 people work on the floor.
It had always seemed obvious that Foxconn’s reason for buying display-maker Sharp was to acquire the capacity to make OLED displays for future iPhones – and a supply-chain report today supports this.
Sharp will set up one 4.5G and two 6G AMOLED production lines with monthly capacity of 13,000, 11,500 and 34,500 glass substrates respectively, with total monthly capacity of 9.85 million 5.5-inch equivalent panels.
While the source is Digitimes, this one seems likely to be at least broadly accurate.
Apple currently used OLED displays only in the Apple Watch, still relying on older LCD displays for the iPhone, but numerous reports suggest that the company plans to switch to OLED screens for iPhones at some point in 2017 or 2018.
Foxconn’s acquisition of Japanese display-maker Sharp looks likely to help Apple reduce its dependence on Samsung as it prepares for a transition from LCD to OLED displays.
The WSJ notes that Samsung currently makes 95% of the world’s OLED displays, and that Apple always aims to have multiple sources of components to reduce risk and strengthen its negotiating position.
While Sharp doesn’t currently make OLED screens, it will almost certainly start doing so under Foxconn’s ownership.
Sharp can springboard off its existing technology to develop the screens, says Alberto Moel, a technology analyst for Bernstein Research. The two types use the same backbone, but OLED screens are topped with a layer of organic compounds instead of the liquid crystal layer for LCDs. “The first part of the production process is similar,” he said.
Foxconn has long been seeking to expand its role in iPhone production from low-margin assembly work into the more profitable component business.
Apple currently used OLED displays only in the Apple Watch, but is widely expected to switch to the newer display technology in the iPhone in either 2017 or 2018. While Samsung looks set to be Apple’s lead supplier, that’s something the iPhone maker will want to change over time.
Deja vu? The Foxconn acquisition of Sharp was almost a done deal a few weeks ago, until Sharp revealed some additional liabilities at the eleventh hour it had not previously disclosed. This meant Foxconn had to go back to the drawing board and re-assess the deal, renegotiating some parts of the contract with Sharp. The initial offer was worth $6.2 billion. Today, the companies announced Foxconn will buy Sharp in a $3.5 billion dollar deal.
It looks like the on-off acquisition of display-maker Sharp by iPhone assembler Foxconn is back on. The WSJ reported earlier that the two companies have been discussing a significantly lower valuation for the company, and Reuters now reports that share trading in Foxconn has been suspended due to a “major announcement.”
Japan’s Sharp Corp and Taiwan’s Foxconn are set to sign a merger deal this week after repeated delays, with the two sides set to agree on a smaller bailout than originally planned for the troubled Japanese electronics maker, two sources familiar with the talks said.
The deal is expected to be finalised during board meetings by both companies tomorrow for around $2B less than originally discussed, after a rather stormy journey.
The Nikkei Asian Review reports the latest on the on-off-maybe acquisition of display maker Sharp by iPhone assembler Foxconn.
Various potential deals appear to be under discussion with both Mizuho Bank and Bank of Tokyo-Mitsubishi UFJ. These include paying the banks less for the shares they hold, reducing the interest rate payable on a joint loan to Sharp and agreeing that the banks will provide financial support in the event that the feared liabilities do indeed materialize after the deal is done.
It was initially reported last month that the deal had been done before details of potential Sharp liabilities put it into doubt. Negotiations then resumed.
It had been suggested at one stage that Apple may help to support the deal, but as there has been no recent mention of this, we’d say this currently seems unlikely. Foxconn has, however, long played a role in helping keep Sharp afloat.
Foxconn’s planned takeover of Sharp, to allow it to begin making displays for iPhones as well as assembling them, is reportedly back on track.
First reports of Foxconn’s interest in purchasing Sharp’s display division emerged last September, when it was reported that Apple would come on board as an investor. Foxconn made a $5.3B bid in January, and it was initially reported that the deal had been concluded last week.
Plans for iPhone assembler Foxconn to acquire Sharp, allowing it to move into making displays for future devices, now appear in significant doubt. Initially reported in Japan as a done deal, the WSJ quickly reported that Foxconn was “delaying” signing – and the same source today reports that talks have broken down.
Sharp Corp on Friday scrambled to salvage a sale to Taiwanese electronics assembler Foxconn as its stock plunged and investors questioned whether the companies could restore trust to make their proposed marriage work after an 11th-hour breakdown in talks …
Update: The WSJ reports that the deal is not yet certain. Sharp may come with some potential financial risks, which Foxconn is evaluating before it actually signs the deal.
Foxconn Technology Group said Thursday it is delaying the signing of a definitive takeover agreement with Sharp Corp. due to new details that the Japanese electronics maker disclosed a day earlier.
Foxconn didn’t elaborate in its statement, but people familiar with the matter said that the Taiwanese iPhone assembler is putting the Sharp deal on hold after reviewing the Japanese firm’s future financial risk. The people said Foxconn received a list of about ¥350 billion yen worth of “contingent liabilities” from Sharp on Wednesday.
Contingent liabilities are costs that a company might face in the future, based on the outcome of lawsuits, accounting changes, supply contracts or other uncertainties.
Last month it was reported that Apple manufacturer Foxconn had bid $5.3 billion to acquire Japanese display maker Sharp, who has faced numerous financial and manufacturing difficulties over recent years. Now, Japanese news outlet Nikkei Asian Review reports that Sharp has accepted an offer from Taiwan’s Hon Hai Precision Industry, better known as Foxconn, for $6.2 billion.
Naturally, Wistron declined comment as 4-inch iPhone production is still a supposed secret. According to Digitimes, Apple is aiming to lower supply channel yield risks by contracting with multiple suppliers for iPhone models. This strategy will continue with iPhone 7 ….
A fire broke out last night at Foxconn’s main iPhone manufacturing plant in Zhengzhou, China, with the WSJ noting that it spanned several floors of the factory. Foxconn confirmed reports, but said that there were no casualties and production was not affected.
Local authorities said they are investigating the cause of the fire. The fire began in the central air conditioning fan and ventilation ducts on the roof of one of Foxconn’s Zhengzhou plants, according to a statement on the website of the Zhengzhou Airport Economy Zone.
There have been previous fires and explosions at Foxconn factories, the most serious of which was at an iPad 2 production facility in 2011, when three workers were killed and fifteen injured. That incident also had a major impact on iPad production.
iPhone manufacturer Foxconn has posted a $5.3 billion bid to buy Sharp, the Japanese display manufacturer who has faced financial difficulties in recent years. iPhone displays are currently manufactured by Sharp, Samsung and LG and assembled at Foxconn’s plant. A successful Sharp purchase puts Foxconn in the position to make iPhone display components, going beyond assembly.
[Update 2: Reuters reports that Foxconn has published an earnings report showing a 20% fall in December revenues. However, the company says that its December earnings were “as expected,” and its full-year earnings are up 6.42% on the previous year, only marginally short of analyst expectations of 7%.]
[Update 1: StreetInsiderreports that Foxconn has denied reports that workers started their lunar new year holiday early, and says that the government payout relates to ‘an insurance premium,’ but makes no reference to any response to the claim that it has been laying off workers.]
The WSJ is today suggesting that Apple is scaling back iPhone orders, noting that iPhone manufacturer Foxconn has been laying off workers and has received a $12.6M subsidy from the Chinese government through a program designed to minimize unemployment.
The piece notes that the subsidy is for Foxconn’s Zhengzhou plant, which is mostly devoted to iPhone production, and says that Apple has also reduced order forecasts for iPhone component makers.
Chinese iPhone factories had some idle capacity in the final two months of the calendar year, when they would typically be racing to chongliang, or “rush quantity,” for Apple, in factory-speak. Some workers at Foxconn’s Zhengzhou factory in inland China were let go on early holiday last month, one of the people involved in the supply said, although the typical new-year holiday season doesn’t start until February.
The WSJ reports that Foxconn and the world’s largest chip assembler, Advanced Semiconductor Engineering (ASE), are fighting for control of the number three company in the chip assembly business, SPIL. ASE assembles chips used in the Apple Watch, while SPIL last year started supplying chips for iPhones.
ASE had planned to take a controlling interest in SPIL in order to protect its market-leading position and remain one jump ahead of competitors. Key iPhone assembly company Foxconn, however, persuaded the company that it would do better by collaborating with the Chinese firm in order to win more of Apple’s business.
SPIL shareholders will vote on the proposed deal with Foxconn tomorrow. Although ASE had already bought some shares in the company, it did so too late to qualify for vote, so has instead sent a letter to other SPIL shareholders urging them to vote against the motion.
All three companies are competing for system-in-package (SiP) orders from Apple, which analysts say will be worth billions of dollars.
There is huge competition for Apple’s business among chip manufacturers and assemblers, with Apple reportedly playing off Samsung and TSMC against each other in order to squeeze out last-minute price cuts for the A9 chip. Samsung’s recent return to profit was attributed to the chips it supplies to Apple.
Shortly after Tim Cook met with the Chinese President, Apple’s CEO has met with Indian Prime Minister Narendra Modi, as expected. The Times of India reports that the two of them discussed the possibility of bringing Apple Pay to the country, and Prime Minister Modi invited Apple to set up a manufacturing base in the country.
Cook was said to have “responded positively” to the idea, though nothing more specific was announced. We’ve known for some time that Foxconn has plans to build multiple factories in India, but neither company has confirmed that these would be manufacturing products for Apple. Foxconn carries out contract manufacturing for a number of high-profile brands.
Apple does, however, have one strong incentive to manufacture iPhones in India … Expand Expanding Close
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