Apple Supply Chain Explosion will Delay iPad 3 Launch?

One of Apple's supply plants in Shanghai was rocked by an explosion on Dec. 17 afternoon and even though no fire broke out, 61 workers were injured and 23 of them had to be hospitalized.

The plant, located in Shanghai's Songjiang Industrial Park, is owned by Pegatron subsidiary Riteng Computer Accessory Co., which was expected to produce the back panels for the iPad, Chinese newspaper Yi Cai Daily reported.

The reason for the explosion is still unclear. The cause of the explosion is under investigation, the company stated.

According to Charles Lin, Pegatron's CFO, there was no fire. Nevertheless 61 workers were injured and 23 of them had to be hospitalized, Pegatron said. Employees who suffered injury on the site have been kept at the hospital for observation,the company said.

Lin also told Reuters on Monday that the factory had stopped its operations. The factory has not started operations yet. Part of the facility is still under pre-operation inspection and part is running trial production, Lin said.

Even though the machinery had been damaged by the explosion, Pegatron said minimal impact is expected for production and business operation.

Only after the city government's investigation and subsequent approval, the normal production in the factory can resume, CNet reported.

Recently, rumors circulated in the Internet that Apple's next generation tablet - dubbed iPad 3 - will launch at the end of the first quarter next year.

However, because of the explosion, many people are wondering if the launch date of the next iPad will be delayed.

According to Shaw Wu, an analyst of Sterne Agee, the incident would have small impact on iPad's production. The risk of disruption to Apple's supply chain due to the explosion in Pegatron's factory is minimal, he told Reuters.

It's a setback but it's relatively minor, Wu said. In his opinion, Pegatron is only a third-tier supplier for Apple. The Foxconn (Chengdu) explosion was a much bigger deal but still they were able to work around it fairly quickly.

Carolyn Wu, a spokeswoman for Apple told The Register that the company is working closely with Pegatron to understand the cause of this accident.

Our hearts go out to the people who were hurt in Songjiang. We are working closely with Pegatron to understand the cause of this accident, the spokeswoman said.

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