Leading analyst houses say Apple is unlikely to suffer significant supply chain disruption after an explosion ripped through one of manufacturer Foxconn’s plants on Friday.
Two people died and 16 were injured in the explosion at the $2 billion (€1.4 billion) Chengdu facility that produces some of Apple’s iPad 2 devices, China’s official Xinhua news agency reports.
However, damage was limited to just one workshop of Hongfujin Precision Electronics – a Foxconn subsidiary – and so is unlikely to affect broader supplies of Apple’s latest tablet, Informa Telecoms and Media principal analyst David McQueen told Telecoms Europe.net.
“I’m sure Apple will have a well stocked distribution channel to combat any problem in the short term,” McQueen notes, adding that the facility in question “is not the main iPad2 production site as most are made in Shenzhen.”
McQueen also speculates that rumored delays to the launch of the iPhone 5 could help Apple if iPad production is stunted by the explosion, by freeing up capacity at other Foxconn facilities.
His view is backed by Gartner. PR manager Holly Stevens told TE.net its sources revealed “the fire was limited to a room in one building with no long-term impact to production as a first assessment.”
The explosion puts Foxconn back in the headlines for all the wrong reasons, after a raft of negative publicity over working conditions that recently saw the firm deny it was forcing staff to sign clauses guaranteeing they won’t commit suicide.