Foxconn explosion not likely to discernibly impact iPad 2 production

Mon, May 23, 2011


Last week, an explosion rocked one of Foxconn’s new manufacturing facilities in Chengdu, China where the explosion reportedly claimed the lives of three individuals and injured approximately 16 others.

The building in question is believed to be Foxconn’s A5 building, responsible for iPad 2 manufacturing. While the full extent of the damage remains to be seen.

While utmost concern and attention should be paid to the loss of human life, there has been speculation regarding how the explosion might affect Apple’s ability to field iPad 2 orders – something it’s already been struggling to keep up with.

The latest we’ve heard, however, suggests that iPad 2 manufacturing shouldn’t experience much of a lull as the plant in Chengdu is not Foxconn’s main iPad 2 production facility. Indeed, of all the iPads shipped in April, reports indicate that around 25-30% of them were from the Chengdu factory with the rest coming from Foxconn’s Shenzhen factory in southern China.

DigiTimes reports:

Foxconn’s goal was to ramp up iPad 2 production at the Chengdu factory site to 3-4 million units in the second quarter from about 600,000 in the first, with an aim to grow the monthly figure to 13-14 million in the second half of 2011.

Meanwhile, Foxconn’s Shenzhen production base will increase production of iPad 2 at a slower pace. Monthly output from the site is expected to increase to 4-5 million units a month in the second quarter from 1.8-2 million in the first, and ultimately reach 9-10 million units in the second half.

Meanwhile, UBS analyst Maynard Um also relayed that the bulk of iPad 2 production is not done at the Chengdu facility while Foxconn CEO Terry Gou reportedly convened with key component suppliers to reassure them that the explosion would not have a discernible impact on iPad 2 production and future products.

Related: Foxconn CEO Terry Gou talks about doing business with Apple


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