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Foxconn Blast

Different Views Come Up About the Effect of Foxconn Blast on iPad Production

Several opinions are separated on whether a blast at a Foxconn factory in Chengdu, China will change the production of iPads of Apple.

Study firm HIS iSuppli cautioned that if production is disturbed until the last part of June, it might affect in a production loss of around 500,000 units of the iPad 2 in the second quarter.

Friday’s blast appeared at a gathering plant in Chengdu managed by Taiwan-based Foxconn Technology Group.  There were three workers who died, as 15 others were injured in a blast that the company said was reasoned by “combustible dust in a duct.”

Amy Teng, a Gartner analyst, said, “We estimate it will be a very small scale impact because the (Chengdu) factory just started production.” She added that some of the production of the iPad is based in other factories in China.

According to Teng, the Chengdu factory creates below 1 million iPads a month. On the contrary, iSuppli estimated production at the facility at 500 units per month.

The said factory is still in operation, although the polishing facility where the explosion happened has been for the time being closed. The operations of Foxconn are also suspended at the polishing workshops at its other factories in China.  The company refused to tell when the suspension would last.

Foxconn BlastTeng said, “Not all the facilities are up and running, and improvements need to be made to the production yield.  At this moment, most of the iPad production is at Foxconn’s other factories in Shenzhen. So we expect the impact to be small.”

Foxconn is presently working with Chinese authorities to study the root reasons of the blast.  Apple as well engaged in the investigations, although the U.S. company has refused to give more remark on the explosion.

The blast of the Chengdu factory has so far once more place the Taiwanese company in unenthusiastic attention. The occurrence was not unintentional, but because of the carelessness of the company in the area of work protection, a Hong-Kong based overseer groupStudents and Scholar Against Corporate Misbehaviour (SACOM) said in a report.  Foxconn replied by speaking SACOM “is seeking to capitalize on the tragic accident.”

People are now wondering whether Apple would find another supplier to produce its iPad products after the news of the explosion was released.  But Teng assured this would not happen, at least for the short term.  She says Foxconn is still the only supplier who has the production capacity and work force to make the iPads on a large quantity.

“It requires a huge amount of capital in equipment and people to support the eco-system to build the iPad,” she added. “We don’t think Apple can find another substitute that easily.”

photo credit: themalaysianinsider.com