Apple Inc.’s (NASDAQ:AAPL) economic activities occur on such a scale that they affect the operation of many other companies, too, and according to a recent report, Chinese tech firms gearing up to fill iPhone 6 orders are hiring new workers by hundreds of thousands. The two main companies involved are Foxconn and Pegatron Corp. Foxconn, a branch of Hon Hai Precision Industry, is set to hire no less than 100,000 additional people to handle the massive orders that Apple has evidently placed for its latest smartphone.
Foxconn is said to be making 70% of the latest production run of iPhones. The slack is set to be taken up by Pegatron Corp., which is also boosting its workforce by around 30%. At the same time, Foxconn is slightly drawing down its workforce in India, though only by 600 workers. The New Taipei company likely wants closer control over production by shifting the bulk of work nearer to home, and probably wishes to avoid somewhat higher Indian wages also. The company’s fortunes are likely to soar even higher, but it is already 113th on the Forbes Global 2000 list.
Pegatron, one of Apple’s unreformed sweatshops, is notorious for producing electronics under appalling working conditions that violate even the low-quality standards of Chinese labor law. Nevertheless, the Cupertino company continues to make use of this corporation’s services to produce its phones and reap larger margins for itself.
According to Matt Margolis, an analyst on the Seeking Alpha site, GT Advanced Technologies (GTAT) is producing massive amounts of sapphire crystal for the new iPhone 6 screens. With upgraded form factors involving larger screens capable of competing with Samsung’s, the iPhone 6 will also include scratch-proof sapphire glass.
Upgrade sales are clearly expected to be huge, since screen production is equally massive. Approximately 2,500 furnaces are poised to begin churning out 500 pound boules of artificial sapphire to support the manufacturing efforts.
These signs and portents also prompted Mr. Margolis to predict GTAT earnings per share (EPS) of $2.84 for 2015, rather than the tamer $1.30 predicted by other analysts and analysis firms. This, in turn, would make the stock much more attractive to investors than it currently is, though GT Advanced Technologies has already gained considerable stock market clout following its pact with Apple (AAPL). If the hiring binge going on in Taiwan’s tech manufacturing sector is anything to go by, his optimistic forecast for the stock may well be proven correct.
