Foxconn, the world’s largest contract electronics manufacturer by revenue, plans to have as many robots as workers in its China factories within three years, according to Terry Gou, chairman and chief executive.

Foxconn, China’s biggest employer, produced Apple’s iPad and other electronic gadgets. The group employs 1m workers but has just 10,000 robots on its production lines.

Mr Gou outlined the ambitious automation plans at a Foxconn gathering late last week in Shenzhen, a coastal manufacturing centre in southern China. According to people who attended the event, the chief executive said the group would have up to 300,000 robots next year and 1m by 2013, highlighting the drastic changes China-based manufacturers are making as competition for labour increases.

“This is part of a broad automation push among China-based manufacturers,” said Alvin Kwock, head of hardware technology research at JPMorgan. “It signals that the cost of labour is no longer lower than the cost of capital.”

Salaries for migrant workers, the mainstay of Foxconn’s China workforce, rose 30-40 per cent last year and are expected to increase by another 20-30 per cent annually until at least 2013, says Dong Tao, chief regional economist at Credit Suisse.

Last year, a series of worker suicides at Foxconn’s Shenzhen factories preceded an outbreak of industrial unrest at Japanese automotive components factories across southern China. The Foxconn deaths were a tragic expression of young workers’ frustration with chronically low wages, and also the often robotic nature of their work.

Foxconn declined to confirm the figures used in Mr Gou’s speech, but stressed it wants employees to move “higher up the value chain beyond basic manufacturing work”.