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Robots To Replace Workers At Apple Supplier

Apple (NasdaqGS: AAPL - news) supplier Foxconn, under the microscope over dubious work practices, has plans afoot to replace employees with robots.

Foxconn has become intrinsically linked with Apple and is increasingly seen as the hidden cost behind the coveted gadgets.

It now employs 1.2 million low paid workers and supplies 40% of the world's electronics for Apple, Sony (Stuttgart: 853687 - news) and Microsoft (NasdaqGS: MSFT - news) .

"No other company in the world has quite the manufacturing scale of Foxconn," the New York Times (NYSE: NYT - news) said.

"It has become a symbol both of China's emerging manufacturing might and sophistication, and of the struggle to improve conditions for the workers responsible for the country's increasingly hi-tech export boom."

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But success has come at a price, as a report from the Fair Labour Association has revealed.

Excessive work hours, labour law breaches and staff forced to work nearly two weeks without a break have been exposed.

And after a string of suicides the electronics firm announced that it would employ up to one million assembly robots on production lines.

Headquartered in Taiwan as the Hon Hai Precision Industry Company, it was founded by billionaire Terry Gou, 61, whose parents fled from the Chinese communists in 1949.

He once rented a shed and made connectors for early Atari games consoles but is now a global leader in nanotechnology, wireless and network chips.

Foxconn has amassed over 25,000 patents worldwide to protect its technological innovations.

As the firm moved from component production to product assembly Mr Gou created "vertically integrated" factories the size of small towns, where staff work in warehouses, dine nearby and live in on-site dormitories.

The year-on-year growth rate of Foxconn exceeded 50% as turnover went from $7bn (£4.4bn) in 2002 to $61.8bn (£38.6bn) in 2008.

Considered China's top employer in 2006 according to a ChinaHR.com poll, it has struggled amid the massive growth.

Once proud to include company milestones on its website, it has failed to update its history page since 2007.

Under further pressure earlier this year, the company said it would improve wages and reduce hours, but analysts remain sceptical of the scale of implementation.

The Foxconn economic model has relied for nearly a decade on enticing migrants into cheap labour in huge factories to build electronic gadgets.

But the scale of operation means Foxconn is finding it difficult to sustain, as a savvy young generation increasingly shuns migration to coastal areas, factory jobs and long work hours.

"Big manufacturers like Foxconn have responded to such challenges by moving factories inland," the New York Times said.

"And worried that the old model is dying, Foxconn has announced plans to invest in millions of robots and automate aspects of production."