Apple Inc could face a production loss of 500,000 iPad 2 tablets after the explosion at Foxconn Technology Group’s (富士康) plant in Chengdu, China, according to research firm IHS iSuppli.
The drop in manufacturing will depend on how long the plant is closed following the explosion on Friday, which killed three people and injured at least 15, iSuppli said.
The estimated production loss could rise further if the suspension of operations at the facility lasts longer than a month, iSuppli said.
Another Foxconn factory in Shenzhen that produces iPads might not be able to make up for the lost output, iSuppli said. The manufacturing breakdown could lead Apple to miss iSuppli’s forecast of 7.4 million iPad 2 shipments in the quarter ending in June, the research firm said.
Mike Abramsky, a technology analyst with RBC Capital Markets, speculated last week that the impact could be larger.
If Chengdu is where Apple’s iPads are mainly manufactured, instead of the Shenzhen factory, the blast could lead to lost production of 1.8 million to 2.8 million iPads, he said.
Abramsky had predicted 8 million iPad shipments during the period.
By contrast, Shaw Wu, an analyst with Sterne Agee in San Francisco, said in a report on Monday that the concerns were “overdone” and that production at other facilities was being ramped up to make up for the shortfalls.
He expects Apple to sell 6.8 million iPads in the quarter ending June.
In Taipei trading, Hon Hai Precision Industry Co (鴻海), which sells its products under the Foxconn brand, saw its share price rise 3 percent to NT$103 yesterday, following a 2.91 percent decline on Monday. The stock got a boost after the firm said it has a week of inventory, allowing it to continue operations as it completes safety checks following the Chengdu explosion.
“Knowing that production won’t be affected gave the market confidence today,” said Calvin Huang (黃文堯), an analyst at Daiwa Securities Group in Taipei, who rates Hon Hai “buy.”
“Previously, the company hadn’t said anything about the situation” regarding production and inventory, he said.
TLG Asset Management (台壽保投信) analyst Arch Shih (施博元) said Hon Hai’s dive on Monday was simply a knee jerk reaction to the explosion on fears that the company’s iPad 2 production for Apple would be seriously affected.
“But, after Apple remained resilient on Wall Street overnight, many investors seem relieved and started to think the impact from the explosion could be limited,” Shih said.
Goldman Sachs said it did not expect any material impact from the explosion as the plant in Chengdu was not the major production line for iPad 2.
Hon Hai is expected to continue to increase its supply to Apple, with possible adjustment of the production schedule, Goldman Sachs said.
Elon Musk’s lieutenants have reached out to chip industry suppliers, including Applied Materials Inc, Tokyo Electron Ltd and Lam Research Corp, for his envisioned Terafab, early steps in an audacious and likely arduous attempt to break into the production of cutting-edge chips. Staff working for the joint venture between Tesla Inc and Space Exploration Technologies Corp (SpaceX) have sought price quotes and delivery times for an array of chipmaking gear, people familiar with the matter said. In past weeks, they’ve contacted makers of photomasks, substrates, etchers, depositors, cleaning devices, testers and other tools, according to the people, who asked not to
Taiwan is attracting a growing number of foreign jobseekers as companies increasingly recruit overseas talent to ease labor shortages and expand global reach, recruitment platform 104 Job Bank (104人力銀行) said yesterday. More than 40,000 foreign nationals searched for jobs in Taiwan through the platform last year, a 28 percent increase from a year earlier, the company said. Malaysians accounted for the largest share of overseas jobseekers at 12.2 percent, followed by Indonesians at 11.9 percent and Vietnamese at 10.8 percent. Indonesian applicants surged more than 50 percent year-on-year, while Vietnamese jobseekers rose by more than 30 percent. Applicants from the
JET JUICE: The war on Iran’s secondary effects have seen fuel prices skyrocket, knocking flight schedules down to earth in return as airlines struggle with costs Airline passengers should brace for more irritation in the next few months as carriers worldwide cancel flights and ground planes to cope with stratospheric increases in jet-fuel prices. Dutch flag carrier KLM is the latest company to cut its schedule, saying on Thursday that it would scrap 80 return flights at Amsterdam’s Schiphol Airport in the coming month. That puts it in the same league as United Airlines Holdings Inc, Deutsche Lufthansa AG and Cathay Pacific Airways Ltd, which have all pruned itineraries to mitigate costs. Global capacity for next month has been reduced by about 3 percentage points, with all
NO SHORTCUTS: Asked about Elon Musk’s Terafab initiative, TSMC CEO C.C. Wei said it takes two to three years to build a fab and another one to two to ramp it up Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday raised its revenue growth forecast for this year to above 30 percent, up from the 25 percent it estimated three months earlier, citing extremely robust artificial intelligence (AI)-related chip demand. “Our customers and customers’ customers, who are mainly cloud service providers, continue to send us very positive signals and outlook,” TSMC chairman and CEO C.C. Wei (魏哲家) said at an earnings conference. The company also hiked its capital expenditure for this year toward the higher end of its forecast, or US$56 billion, as it aims to step up advanced chip capacity expansions, such as
RSS