In a move that underscores the shifting dynamics of the global tech manufacturing industry, Foxconn Technology Group, a key supplier for Apple, is offering higher wages to workers involved in making Huawei Technologies’ handsets at its production unit in Shenzhen, Southern China, compared to those working on Apple’s iPhones. The development has been revealed through recruitment posts and information provided by labor agencies.
At Foxconn’s FIH unit, which specializes in manufacturing Huawei smartphones and operates under the umbrella of Foxconn International Holdings, new workers at the factory in Shenzhen’s Longhua district are being offered an hourly wage of 26 yuan (approximately $3.60). This rate is notably higher than the hourly wage of 21 yuan offered to workers at Foxconn’s integrated Digital Product Business Group (iDPBG), responsible for iPhone production.
The FIH unit has increasingly become a vital player in the manufacturing ecosystem of Huawei and other smartphone companies, predominantly focusing on Huawei’s production requirements. Workers recruited by the FIH unit are assigned to different teams based on current demand, with a significant likelihood of being involved in the production of Huawei handsets.
This move by Foxconn comes in the midst of fierce production competition between Apple and Huawei, both of whom have recently launched new 5G smartphones in the world’s largest smartphone market, China. With the global push for 5G technology and increased demand for compatible smartphones, both tech giants are racing to capture a larger share of this lucrative market.
The wage differentials between Foxconn’s Huawei and iPhone production units highlight a broader trend in the industry. Foxconn has been known for its sizable workforce and production facilities in China, particularly in cities like Zhengzhou and Taiyuan. However, changes in market demand, geopolitical tensions, and evolving supply chain strategies have led to shifts in wage structures.
In the past, Foxconn employees could earn substantial bonuses and higher monthly incomes, especially during peak production seasons. However, according to an internal source at Foxconn’s labor service supply company, this year’s bonuses may increase by only around 1,000 yuan (approximately $137) due to reduced orders and a lesser need for workers.
It’s worth noting that Apple has been actively diversifying its supply chain to reduce dependence on a single manufacturer and mitigate risks associated with geopolitical tensions. This diversification has led to a reevaluation of wage structures at Foxconn, which remains a vital partner for Apple but is also expanding its work for other prominent tech companies like Huawei.
Foxconn’s decision to offer higher wages to workers manufacturing Huawei handsets compared to iPhones highlights the competitive landscape of the tech manufacturing industry and the evolving dynamics of supply chains in response to market demands and geopolitical considerations. As Apple and Huawei continue their battle for dominance in the 5G smartphone market, such wage differentials may have significant implications for the workforce and the broader industry.