The pace of "machine substitution" needs to be accelerated

In China, there are countless foreign brand foundries, large and small, who jointly hold up the reputation of China's “world factory”. However, in recent years, with the increase in production costs and the impact of the international economic downturn, The days of OEMs are not that good. Industry insiders estimate that at least hundreds of large factories in Dongguan before the Spring Festival have closed down or have stopped production.

On December 5, 2014, Suzhou Joint Construction Technology Co., Ltd., a leading manufacturer of mobile phone parts and components, announced the closure. At the same time, Nokia mobile phone parts and components supplier in Huikou Town, Suzhou, also announced the closure of production and dismissed most of its employees. The two companies, as well-known local foundryers, have had more than 10,000 workers at their peak. They have provided OEM services for Apple and Nokia for a long time, but their glory is no longer. They eventually did not survive 2014. The collapse of 2015 was a time when it was about to come. It was an analysis and it also caused reflections within the industry.

The closing of domestic foundries has been closing more and more frequently. Analysis by industry insiders is mainly due to the fact that the domestic production cost advantage has gradually been lost, and some of them are still at the lowest end of the industry chain, with low profits, and the bargaining power of downstream customers is getting more and more. low. Many companies have too much dependence on a single customer, so that once the customer's order is over, the company will be unable to continue.

In China, the loss of the advantage of the demographic dividend is already an indisputable fact. If the foundry company still has no sense of crisis, it will be over and over, and the collapse will be unavoidable. In this diversified era, it is difficult to achieve long-term development by only relying on OEMs, and it is even difficult to escape the fate of demise. Foxconn, the world leader in foundry companies, is on the path of transformation and is worthy of a lot of contracting companies.

From a small workshop of 100 people in Shenzhen, Foxconn has become the world’s most recognized foundry by relying on OEMs. At present, Foxconn has more than one million workers in mainland China. Foxconn started by foundry, but it did not work on behalf of a single industry. This year, Foxconn continued to actively engage in high-tech fields such as smart homes, cloud services, and robotics. It constantly interacts with companies outside the industry and strives to find products other than foundry. Economic explosion point.

In the field of OEM services, Foxconn is also slowly abandoning the original human-sea tactics and gradually increasing the level of automation in the production line to reduce production costs. The most impressive example of Foxconn's attempt at automation is the "Millions of Robots Project" proposed by Gou in 2011. In 2011, when Gou took a look at Foxconn Shanxi Jincheng Park, he said that by 2014 Foxconn will use 1 million robots on its production line. In an external event in 2014, Gou said that Foxconn’s million-dollar robot plan has not stopped and is still in progress. Although Foxconn has far from this goal, there is still a considerable gap, but its perseverance and spirit of exploration in automation is commendable.

China's foundry companies must recognize the current reality in China and take the path of diversification in the light of the abundant funds on hand. Analysis of the causes of business failures can be found that the rising cost of OEM is a big factor in the closure of enterprises. Enterprises should speed up the pace of “machine substitution”, use automated upgrades to improve the production line, reduce production costs, so that in the future fierce market competition In the initiative.