Korean Market Research firm DisplayBank predicts a loss of 400,000 iPad 2 units due to Foxconn Plant Explosion on May 20.
On May 20 an explosion occurred in a Foxconn plant in Chengdu, China. The incident cost the life of three Foxconn employees. Now, a week after the event analysts start to weigh in on the impact of the iPad 2 supply for Apple.
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Korean market research firm DisplayBank issued a press-release today putting the loss of iPad 2 production at 350,000-400,000 units. Shenzhen and Chengdu are mainly producing iPad 2 and Chengdu plant is producing about 32%. Due to this explosion, about 3~5% of total production disruption is expected. Chengdu plant, in charge of parts and assembling of iPad 2, is in operation for total of 24 production lines. A05 plant, where explosion occurred, produces iPad2 back cover, and there are 4 back cover production plant located in Chengdu, including A05, and daily production is approximately 50,000~60,000 units.
Ricky Park, senior analyst at Displaybank noted “Given existing back cover production capacity, the total production disruption will be approximately 550,000~700,000 units, but since current inventory is about 200,000~300,000 units, actual production disruption will be about 350,000~400,000 units. However, through procurement from Shenzhen plant, damage will be minimized.”
Park added, “Foxconn planned to increase iPad2 production volume from Chengdu plant to a similar level of Shenzhen plant in June and further increase production in July, but due to the explosion, this plan is also expected to be disrupted.”
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For consumers it likely means that the iPad 2 supply is not improving and stays the same in the next month. Right now the online Apple Store has a shipping delay of 1-2 weeks.