TAIPEI (CNA) – Foxconn Technology Group, the world’s largest contract electronics maker, said it has raised wages by 7 percent for its employees on average, effective June 1.

Speculation on Foxconn’s wage hike had been circulated earlier on June 11 on PTT, an online forum popular in Taiwan, before Hon Hai confirmed the raise for employees who have been on the payroll for one year or longer.

Foxconn, known locally as Hon Hai Precision Industry Co., said the raise will enable its employees to share in the company’s earnings and help the company recruit talent and encourage existing employees to stay together for future growth.

The wage increase applied only to the company’s employees in Taiwan, totaling 6,000 according to local media, and was carried out based on employee performance, Foxconn said.

The company’s subsidiaries will review their operations, compensation policies and competitiveness in the market to decide whether they will give their employees a raise, Foxconn said.

Terry Gou (郭台銘), founder and chairman of Foxconn, who announced his intention in mid-April to seek the opposition Kuomintang’s nomination for president, said in May that he will work with other Taiwanese electronics firms to push up compensation for employees and help end long-term wage growth stagnation.

In 2018, Hon Hai ranked sixth in pay among listed companies in Taiwan with average compensation of NT$3.24 million per employee.

In the same rankings, Foxconn Technology Co., a metal casing subsidiary of Foxconn Technology Group, finished first with average compensation of NT$5.96 million, while Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest chipmaker, ranked 21st after paying its employees NT$2 million a year on average.

The raise came after Hon Hai saw its net profit fall 12.6 percent in 2018 from a year earlier to NT$129.07 billion, the lowest level in five years amid escalating competition. ●

By Chung Jung-feng and Frances Huang