Materials and labor shortages may affect Apple iPad 2 and iPhone 4 orders

“Taiwan-based electronics manufacturing service (EMS) provider Foxconn Electronics (Hon Hai Precision Industry) is reportedly facing a shortage of both labor and materials at its plants in Chengdu, China, which is likely to affect shipments of iPad 2 and iPhone 4 orders in the second quarter, according to sources from upstream component makers,” Yenting Chen, Ninelu Tu and Joseph Tsai report for DigiTimes.

Chen, Tu and Tsai report, “Apple sold 18.6 million iPhones in the first quarter of 2011, up 14.9% from 16.2 million units in the fourth quarter of 2010; however, as Apple estimates sales of 20-22 million iPhones in the second quarter of 2011 with a sequential growth over 7%, its demand for more shipments has started to give its upstream assembly partners, Foxconn and Pegatron Technology stronger pressure.”

“As for Foxconn’s plants in Chengdu, which are used mainly for iPad 2 manufacturing, although the company planned 52 production lines at the plants for manufacturing iPad with annual capacity already surpassing 40 million units, as Japan’s earthquake seriously impacted component supplies such as power amplifiers and memory to the plants, while the plants’ labor is also falling short, supplies of iPad 2 are still mainly from its plants in Shenzhen,” Chen, Tu and Tsai report. “As a result, Foxconn may have difficulty in satisfying Apple’s demand for supplying an average of 2.5-3 million units of iPad 2 each month in the second quarter, the sources noted.”

Read more in the full article here.

[Attribution: CNET. Thanks to MacDailyNews Reader “Keith L.” for the heads up.]


  1. DigiTimes is notoriously wrong. I’ve been to Chengdu and can state that labor availability is not a problem Chengdu is a city of several million with an abundance of higher education facilities.
    This story caused AAPL to drop $5.00 this morning, but volume shows it was a limited selloff by the uninformed. By the close AAPL had nearly recovered all of it’s loses.

  2. Nothing new here! Tim Cook and Apple keep telling everyone, “If we could have made more we could have sold more”. Demand is out pacing supply and Apple has more than $65,000,000,000 that says it is working on this. Did you see anything above about Foxconn setting up an assembly plant in Brazil? This is what is called FUD to hold down the stock price.

  3. In the meantime not Foxconn will be deploying 5 lines working at 20% capacity to produce the Xoom, Playbook & other craptastic Android dung.

    1. Actually, Apple clearly stated they were having no supply issues in their recent quarterly conference call. Those who take the time to be informed know much better than you.

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