14 DAY TRIAL // IHS iSuppli believes that Wall Street analyst predictions of iPad 2 production falling by as much as 2.8 million owing to the Chengdu disaster are too pessimistic. The market intelligence firm believes the setback is no greater than 500,000 units. However, it’s not just iPad production that Friday’s disaster will affect, iSuppli warns.
The research firm doesn't believe analyst predictions that units and manufacturing could drop by 36 percent in the third quarter, as a result of the explosion occurring at Foxconn’s Chengdu plant.
At most, “the explosion at Foxconn’s plant in Chengdu, China, could result in a production loss of 500,000 Apple Inc. iPad 2 tablets in the second quarter,” iSuppli states, according to a new analysis based on its own investigations.
“Total iPad 2 production capacity at the Chengdu site amounts to about 500,000 units per month,” iSuppli outlines.
“If the explosion results in a production shutdown until the end of June—which may or may not happen, depending on the outcome of the still-pending investigation—a production stoppage of half a million units could result,” the company elaborates.
iSuppli does take into account that the impact could be larger, should the production suspension last longer.
But the prominent analysts at iSuppli believe “The impact of this disaster will only last for the short term, given that there are more than 10 factories in the Foxconn Chengdu plant, and because the explosion occurred on the third floor of one of the buildings.”
They also note that Chengdu was still a young production facility that recentl accounted for approximately 20 percent production, and that “the shortage of raw components due to the Japanese earthquake in March already had slowed down the production ramp at the Chengdu plant.”
However, it’s not just iPad production that Friday’s explosion will leave its mark on. iSuppli believes it will be interesting to see whether or not the disaster will impact the relationship between Apple and Foxconn.
In fact, the marketing intelligence company seems certain that “the impact of the explosion will reignite the debate regarding Apple’s corporate responsibility.”
They make this assertion based on the fact that, “From a process and quality point of view, Apple must have deemed the Chengdu facility acceptable.”
Foxconn will undoubtedly see pressure to address workplace safety yet again, iSuppli also believes.
Softpedia recently reported on the possibility of seeing more trouble at Foxconn’s iPad production facilities, as a result of management pushing workers to produce more units.