Explosion at Foxconn Plant Will Impact iPad Sales

FBN's Shibani Joshi breaks down the impact of the explosion in China on Apple's iPad production.

Apple Shares Take Hit on iPad Plant Explosion

By Markets FOXBusiness

Shares of Apple (AAPL) opened 1.5% lower Monday morning after one of the tech giant’s iPad 2 manufacturers, Foxconn Technology, confirmed on Sunday that three people have died following a large explosion on Friday at its plant in China.

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Investors continue to weigh the impact of the three fatalities and 15 employee injuries, which are believed to have been caused by an explosion of combustible dust in a duct at a plant polishing workshop, according to initial investigations.

Apple has said it is working with Foxconn to understand how the explosion occurred.

Taiwan’s Foxconn, which is one of Apple’s top gadget makers, operates in Chengdu, the capital of China’s Sichuan province in the country's southwestern region. All operations at that workshop and similar workshops have been suspended, though the company said production at its other facilities across China are running as usual. 

The incident comes as Apple struggles to keep up with strong demand for the tablet. While it remains unclear how the second generation iPad’s supply chain will be impacted, some analysts have predicted the stoppage will only add to the shortage. Others have forecasted only a short-term impact, pointing to Foxconn's other 11 facilities across China.

Shares of Foxconn ended down about 2.9% Monday at 4.08 Hong Kong dollars (53 cent).

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