2 August 2011 Last updated at 02:33 ET

Foxconn to boost use of robot machines in manufacturing

Taiwanese electronics manufacturer Foxconn, which assembles products for firms including Apple, said it would sharply increase its use of automated equipment in its factories.

The company plans to have 300,000 robots by next year, Chairman Terry Gou was quoted as saying by local media.

Foxconn currently has 10,000 machines doing basic manufacturing work.

The company has had major labour issues in the past such as wage disputes and worker suicides.

Mr Gou's comments were made at a staff gathering in Longhua and were first reported by the China Business News and the Financial Times newspaper.

The company has since released a statement, saying that Mr Gou wanted to move 1 million employees "higher up the value chain".

In the statement, Mr Gou added that the move towards automation was aimed at shifting "workers from more routine tasks to more value-added positions in manufacturing such as research and development, innovation and other areas that are equally important to the success of our operations".

Rising salaries

The bulk of Foxconn's manufacturing is done in mainland China and wages have been on the rise.

Foxconn, as well as other manufacturers, have tried offsetting this increase in costs by moving factories and production bases inland, where labour, land and energy are often cheaper.

Some analysts say that the automation could be another way to cut costs.

Alistair Thornton, China analyst for IHS Global Insight in Beijing, said that the company was "leading the way in the next phase of automation for low-cost production".

"It's no longer easy to double production by doubling your work force, it might be now cheaper to buy a new machine in the long run," he added.