Foxconn to plug at least $340M into AI R&D over five years

Manufacturing giant Foxconn has said it will make a major investment in artificial intelligence-based R&D as it looks for new business growth opportunities in a cooling global smartphone market, Nikkei reports.

“We will at least invest some 10 billion New Taiwan dollars ($342M) over five years to recruit top talent and deploy artificial intelligence applications in all the manufacturing sites,” said chairman Terry Gou.

“It’s likely that we could even pour in some $10BN or more if we find the deployments are very successful or can really generate results.”

Gou added that the ambition is to become “a global innovative AI platform rather than just a manufacturing company”.

Data put out this week by Strategy Analytics records a 9 per cent fall in global smartphone shipments in Q4 2017 — the biggest such drop in smartphone history — which the analyst blames on the floor falling out of the smartphone market in China.

“The shrinkage in global smartphone shipments was caused by a collapse in the huge China market, where demand fell 16 percent annually due to longer replacement rates, fewer operator subsidies and a general lack of wow models,” noted Strategy Analytics’ Linda Sui in a statement.

On a full-year basis, the analysts records global smartphone shipments growing 1 percent — topping 1.5 billion units for the first time.

But there’s little doubt the smartphone growth engine that’s fed manufacturing giants like Foxconn for so long is winding down.

This week, for example, Apple — Foxconn’s largest customer — reported a dip in iPhone sales for the holiday quarter. Though Cupertino still managed to carve out more revenue (thanks to that $1k iPhone X price-tag). But those kind of creative pricing opportunities aren’t on the table for electronics assemblers. So it’s all about utilizing technology to do more for less.

According to Nikkei, Foxconn intends to recruit up to 100 top AI experts globally. It also said it will recruit thousands of less experienced developers to work on building applications that use machine learning and deep learning technologies.

Embedding sensors into production line equipment to capture data to feed AI-fueled automation development is a key part of the AI R&D plan, with Foxconn saying earlier that it wants to offer advanced manufacturing experiences and services — eyeing competing with the likes of General Electric and Cisco.

The company has also been working with Andrew Ng’s new AI startup Landing.ai — which is itself focused on plugging AI into industries that haven’t yet tapping into the tech’s transformative benefits, with a first focus on manufacturing — since July.

And Gou confirmed the startup will be a key partner as Foxconn works towards its own AI-fueled transformation — using tech brought in via Landing.ai to help transform the manufacturing process, and identify and predict defects.

Quite what such AI-powered transformation might mean for the jobs of hundreds of thousands of humans currently employed by Foxconn on assembly line tasks is less clear. But it looks like those workers will be helping to train AI models that could end up replacing their labor via automation.

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