Date: 25th May 2011

Analysts forecast iPad production delays & losses

Market researcher IHS isuppli has reported the explosion at Foxconn's plant in Chengdu, China, could result in a production loss of 500,000 Apple's iPad 2 tablets in the second quarter. The analyst company states total iPad 2 production capacity at the Chengdu site amounts to about 500,000 units per month. 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. Should the production suspension last longer, the impact on production could be even greater.

As per IHS isuppli while most iPad 2 production takes place at another Foxconn facility in Shenzhen, that plant may not be able to compensate for all the lost output in the second quarter at the Chengdu site. The Shenzhen facility at present has capacity to produce 7.5 million units in the second quarter-iSuppli forecasts 7.4 million iPad 2 units will be shipped out during this period. To support these shipments, Foxconn must manufacture a larger quantity of devices, at between 7.8 and 8.1 million units during the second quarter. This means that Foxconn's shipments will fall short of expected levels by between 300,000 and 600,000 units in the second quarter as per IHS isuppli.

Another market researcher Displaybank said supply disruption seems inevitable until mid-June 2011.

Though the production might slow down due to both Japanese earthquake in Japan & the mishap in the Foxconn plant, but the impact going to be minimal.