Following the blast explosion at an Apple iPad factory at the weekend, many believe shortage of the iPad 2 could ensue.The explosion, which killed 3 and injured at least another 15 at Apple contract manufacturer, Foxconn, which just this year began shipping the device from its Chengdu plant and planned to base 60 per cent of its iPad 2 production out of the site.
The explosion, the precise cause of which unknown is thought to have been prompted by combustible dust in a polishing operation.
Foxxconn, known locally as Hon Hai, are said to have suspended all manufacturing operations where polishing takes place while the incident is being investigated, impacting on all Apple as well as fellow contractor Sony’s production lines.
However, the blast did not destroy the plant altogether and left the rest of the building largely unscathed, Foxxconn said.
The plant, located west of Chengdu, in the western region of China opened late last year to meet soaring global demand for iPad 2 with its Shenzhen production base to be moved there.
However, analysts are still uncertain how the incident will hit production, admitting it is “difficult” to tell whether the availability of the iPad 2 will be affected, according to David Hsieh, VP, Greater China area, DisplaySearch.
“It is believed that Apple approved a shift in production from Shenzhen to Chengdu earlier this year. Foxconn’s plan is to build on the order of 50 iPad assembly lines in Chengdu, each with a manufacturing capacity of one million units per year.”
However, these ambitious plans could now suffer a major dent, depending on how long work is suspended at Chengdu and if Shenzhen ops can increase capacity.
And what is also uncertain is how this will affect global sales if lack of supply can thwart consumer appetite for Apple’s cult tab.
Just weeks ago it was unleashed in the Chinese market, and subsequently prompted a riot among consumers in one of Beijing’s top Apple Stores, eager to get their hands on the sought after device. Windows were broken and four people were hospitalised.
China is thought to be one of the biggest global market for the iPad 2.
However, there could be further trouble ahead, bleieves Hsieh.
“Chengdu, in Western China, is a fast-growing region with high-tech manufacturing activity. Moving production to western China is generally done to utilize low labor costs, but it is also challenging, as the components supply chain is not very mature in that area.”
Apple have said it is “we are working closely with Foxconn to understand what caused this terrible event.”
