Supply Disruptions Triggered by Foxconn Worker Protests
Monitoring Staff Also Reduced with DarwinAI Implementation
Apple is reportedly pushing to automate the iPhone assembly process, aiming to reduce the workforce involved in production by half, according to U.S. IT media outlet The Information on the 24th (local time).
The outlet stated, "Apple is restarting supply chain and production automation projects that had been on hold due to high initial costs," adding, "The ultimate goal is to reduce the number of workers on the iPhone assembly line by up to 50%."
The media explained that the bold move toward process automation by Apple is rooted in past unrest at its former partner Foxconn. In November 2022, workers at Foxconn’s Chinese assembly plant, Apple’s largest partner, staged large-scale protests over wage issues and China’s strict COVID-19 prevention policies. Clashes with police occurred during the protests, disrupting iPhone production.
Shortly after this incident, Sabih Khan, Apple’s Senior Vice President of Operations, reportedly instructed managers to reduce the number of workers in the final iPhone assembly process by 50% over the coming years. The media also reported that automating iPhone production costs hundreds of millions of dollars annually, and Apple is pressuring its partners to make upfront investments in automation.
Apple’s acquisitions of Drishti and DarwinAI last year and earlier this year have also contributed to product production automation. Drishti identifies bottlenecks and production issues in real time, while DarwinAI is developing technology to visually inspect parts during manufacturing. The outlet noted that the final assembly process of the iPhone 15, released in September last year, already involved a "significant degree of automation." Plans to automate the assembly of iPhone buttons and some parts for the upcoming iPhone 16 were reportedly canceled due to a high defect rate.
As process automation and the use of artificial intelligence (AI) expand, existing factory workers’ jobs are expected to face significant threats. According to Apple’s annual supply chain report, the number of monitoring staff overseeing working hours at Apple’s partners dropped sharply from 1.6 million in 2022 to 1.4 million last year.
Meanwhile, Apple faces the risk of paying fines amounting to up to 10% of its global revenue after becoming a target of the so-called "Big Tech anti-abuse law" introduced by the European Union (EU). Apple’s App Store has been criticized for preventing developers from providing price information within applications or communicating with consumers about services available outside the App Store. Despite these challenges, Apple’s stock closed slightly higher at $208.14 on the New York Stock Exchange that day.
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