The Chinese firm, KYE Systems, supplies US companies including Microsoft and HP.
The National Labor Committee (NLC), a human rights group, described working conditions in the KYE factory in Dongguan province as being "like a prison".
"The young people are trapped because of the working hours," NLC director Charles Kernaghan told ZDNet UK on Wednesday. "They get pitiful wages in military conditions with grueling production schedules. This place is like a prison."
Before the recession, 5,000 workers aged as young as 16 years would work 15-hour shifts, seven days per week, Kernaghan said. The 3,000 employees at the factory work an 83-hour, six-day week for the equivalent of 65 cents an hour, of which they take home 52 cents, he added.
Microsoft said it was aware of the NLC report and had launched an investigation. "Microsoft is committed to the fair treatment and safety of workers employed by our vendors," the company said in a statement. "Microsoft has invested heavily in a vendor accountability program and robust independent third-party auditing program to ensure conformance to the Microsoft Vendor Code of Conduct."