Foxconn chief Terry Gou said its been spending heavily to fight the perception that its factories are sweatshops.
"We've discovered that this (improving factory conditions) is not a cost. It is a competitive strength," Gou told reporters after a ground-breaking ceremony for the company's new headquarters in Shanghai.
"I believe Apple sees this as a competitive strength along with us, and so we will split the initial costs."
It's unclear how much of the improvement costs will be paid by Apple.