By ,
Published November 04, 2015
An explosion at a Taiwanese factory that manufactures Apple iPads killed three workers on Friday and may affect production of as many as 2.8 million units, according to one estimate by an industry analyst.
But somehow, that won't put a noticeable dent in availability.
"There probably is going to be no impact" if production resumes as expected in the next few days, said Citigroup analyst Kevin Chang in Taipei.
Estimates of the impact on production of Steve Jobs' magical device ranged from minimal to up to 2.8 million units in lost output -- a number equal to just over half the number sold in the first three months of this year. But analysts said the plant wasn't the biggest producer of Apple's iPads, so the brief delay in production is unlikely to affect overall availability.
Analyst Maynard Um with UBS Investment Research called the plant is a secondary location for iPad 2 production that makes less than 20 percent of the company's tablets.
"Although the issue is unlikely to help supply issues to meet strong global demand, we see this issue as temporary and note there are few companies in our coverage that have as strong an end demand picture," Um wrote.
Industry news site Digitimes described the plant as slightly more important, producing up to 30 percent of iPad 2 tablets for Apple, but it also downplayed the plant's overall role.
That a major interruption in production won't affect supply may come as a surprise, given sales so strong that Apple is already struggling to keep up with demand. Apple's chief operating officer, Tim Cook, said last month the Cupertino, California, company was working through "the mother of all backlogs" on orders.
Still, Apple's market position is so strong that it can easily ride out potential supply disruptions, said David Wolf, a technology marketing consultant in Beijing.
"A few issues on the supply chain aren't going to hurt it now," said Wolf, CEO of Wolf Group Asia. But he said Apple could face challenges from products such as Google's tablet computer.
"They've got competitors who are running very hard to catch up," Wolf said. "So these aren't issues today but that will not always be the case."
Foxconn Technology Group, the contractor that manufactures Apple's iPhones and iPads, said Friday's blast in the western city of Chengdu killed three employees and injured 15. Foxconn said the blast was caused by combustible dust in a workshop that polished products. It said operations in workshops that do similar work at its other factories in China would be suspended pending an investigation.
All of Apple's iPads are produced at Foxconn factories in Chengdu and Shenzhen, near Hong Kong, said Chang. But he said that is not overly concentrated for an industry in which a contractor with a single factory might supply a laptop computer sold worldwide.
Foxconn, a unit of Hon Hai Precision Industry Co., is a leader in a contract manufacturing industry that helps global electronics brands hold down costs. Chinese factories produce 80 to 90 percent of the world's notebook computers and 50 to 60 percent of mobile phones.
The Associated Press contributed to this report.
https://www.foxnews.com/tech/deadly-explosion-at-ipad-factory-wont-affect-gadget-supply