The Foxconn plant in Chengdu, China that suffered a deadly explosion last month that killed three workers and injured 15 more is back up and running today after weeks of being shut down while authorities conducted an investigation. Foxconn also wanted to make sure the possible cause of the explosion, a buildup of dust in the plant’s ventilation system, was addressed and that no other problems were present.
Initially, sources said the accident did not affect the assembly line for iPad 2 and the production of the new popular Apple tablet would not be effected. That turned out not to be true. Researchers at iSuppli.com said iPad 2 production may have been set back by as many as 500,000 units. Foxconn stated they had enough parts on hand and availability in other manufacturing plants to keep up with production demand during the time the Chengdu plant was closed.
All Things D notes that Foxconn’s investigation into the explosion has ended but a cause has not yet been released by the company.
Brian White, an analyst from Ticonderoga Securities speaks about the effect of the Foxconn plant shutdown:
Our meetings today indicate that the Chengdu facility has been held back by yield issues on certain outside components; thus, the operation may not have reached the optimal utilization rate. Therefore, the explosion in Chengdu may result in more of an equilibrium situation with certain component vendors, rather than a shortage situation. Netting this all out, we believe the production of iPad 2 will be supply constrained during the June quarter; however, we are not prepared to place the bulk of the blame on the Chengdu operation.
UPDATE: According to All Things D, Foxconn has determined the explosion at their Chengdu facility last month was “likely” caused by a buildup of combustible aluminum dust in the ventilation system. They have since updated their ventilation systems and changed dust disposal policies to prevent any future accidents.
While the investigation into the tragic explosion that took place at our facility in Chengdu is ongoing, we have addressed the preliminary finding, that the accident was likely due to an explosion of aluminum dust in a ventilation duct, by putting in place improvements in workshop ventilation, a total revamping of the policies and practices related to the disposal of that dust, and through the application of new technologies that will further enhance the safety in these workshops.
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