Shortages of Components and Labor Affecting iPhone and iPad Production?

white iphone 4 ipad 2
In a pair of reports today, DigiTimes claims that Apple's manufacturing partner Foxconn is experiencing shortages of both labor and component supplies required for iPhone and iPad production, with Apple also being among the companies still scrambling to secure component supplies in the face of increasing supply chain tightness resulting from the Japanese earthquake that has seen suppliers nearly run through any cushion they may have had.

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.

According to the reports, Foxconn had planned 52 iPad production lines at its Chengdu plants capable of pumping out a total of at least 40 million units per year, but the component shortages and labor issues have meant that the manufacturer is falling short of Apple's current demands for 2.5-3 million units per month.

The component shortages stemming from the effects of the Japanese earthquake and the resulting country-wide power issues are said to have led to electronics manufacturers seeking to stockpile existing supplies of components while attempting to play down those moves lest suppliers realize the extent of the shortages and increase prices.

The sources pointed out that PC- and smartphone-related players have all claimed to have not seen any supply issues after the earthquake because of concerns that it might cause upstream players to panic and even raise their product prices, while trying to prevent the subject from impacting their new product launches. However, most of these makers have all been working on stocking their component inventory behind the scenes, the sources added.

The sources noted that several component suppliers are already close to having shortages with the real challenge expected to hit in June. The shortage crisis is also expected to bring issues such as rising costs and an increased rate of defective products in the future.

Apple shipped 4.69 million iPads during the first quarter of 2011, well below what most observers were expecting. The shortfall was reportedly due to the production transition from the original iPad to the iPad 2, with several technical challenges including light leakage on displays from LG and speaker production issues also affecting shipments.

Related Roundup: iPad
Buyer's Guide: iPad (Buy Now)
Related Forums: iPhone, iPad

Top Rated Comments

guzhogi Avatar
135 months ago
Maybe Apple should open up a factory in the US. Plenty of unemployment over here!
Score: 5 Votes (Like | Disagree)
Old Tony Avatar
135 months ago
Maybe Apple should open up a factory in the US. Plenty of unemployment over here!

Good idea, won't happen though (sadly) :(
Score: 3 Votes (Like | Disagree)
WestonHarvey1 Avatar
135 months ago
Respectfully, I dont think so. Apple already has very high profit margins...more so than most competition. That 30% profit margin could be lessoned to facilitate American made goods and the additional cost associated with them. All that said, Im not coming from this with a financial argument, more so a moral one. I think it would be wonderful if Apple made the decision to support more American jobs (not that they dont provide many currently).
I'm not sure why it's a moral argument. Disclaimer, I'm a jingoistic pro-American extreme right wing nutjob. I want America to succeed - but I want that to happen because we're the best and have created the true advantageous position through merit and not trickery.

That said, I don't understand why I should want someone in China to be unemployed just so an American can have a job. They're human beings with families to feed. I also don't necessarily want my children to toil away in a factory. I feel bad for the Chinese that have to.
Score: 2 Votes (Like | Disagree)
Thunderhawks Avatar
135 months ago
+1

Id love Apple to be a positive example of American made electronics. Id definitely feel more at ease to paying their higher prices, if so.
1) For the ipad you are not paying higher prices. Competitors are struggling to match the ipad's price and feature ratio.

2) That would not solve the availability of components. It's a shortage

3) All products would become more expensive if produced in the US.
Even when people say, I would pay more, they usually don't!

4) This discussion was already held in other threads. Many of the US laws are not conducive to building factories here.
By the time a State or area would be done with just the environmental review other countries built the plant already.
Add capital gains taxes, unions etc. etc. and you'll know why these plants are not here.

5) The type of labor the assembly of millions of pieces requires is not available in the US. (See Cato Institute studies)
The higher education workers will not do these jobs. The lower education workers we don't want near these jobs.
The majority of manual labor is almost in the hands of the hispanic community, who do this well.
(On a sarcastic note, ask an American worker to lift a few heavy boxes and they'll call OSHA to have it automated or pass a regulation)

"Buy American or produce American" is a patriotic phantasy and doesn't account for the fact that Americans have many jobs in importing and exporting, as well as work internationally. If all the countries would isolate themselves only doing "home based" production, innovation would stifle and we'd go backwards.

The concept of FREE enterprise should apply to everybody all over the world.

The business world is now heavily integrated and in the very end it's all about money and profits and share prices.

Nobody pays anybody for being "nice" and giving jobs!

Reality hurts:-)
Score: 2 Votes (Like | Disagree)
toddybody Avatar
135 months ago
Maybe Apple should open up a factory in the US. Plenty of unemployment over here!

+1

Id love Apple to be a positive example of American made electronics. Id definitely feel more at ease to paying their higher prices, if so.
Score: 2 Votes (Like | Disagree)
Thunderhawks Avatar
135 months ago
That is easy. Yes, I would. One company needs to make the bold move and others will follow. I only picked Apple because they basically sell everything they make so they would provide more jobs and they are a leader in the industry and it would make news for others to follow. I think it would be cool if Dell did this because they are a high volume and well known name.
There is no guarantee that they will always sell everything they sell. ( I hope so, but competition will always be there)

And, let's say they don't what then?
Factories shouldn't be built based on thinking it will go on positively forever.
I think the US auto industry has demonstrated that clearly.

People act as if owning a factory is easy. (I actually own a small factory, so I know it's not.
I am in a niche field and easily compete with the Far East))

Apple would have to add substantial personnel to manage such a place, which takes away from what they really want to do. (Build great devices people want to buy)

It is far easier NOT to own a factory. You buy whatever you need at an agreed upon price when you need it. And when you don't have anything you need, you don't have a factory and workers to worry about.

If you have issues with your suppliers you work with them to fix them or you go to another manufacturer.

Try that with your own place. QC is bad, get another manager, QC is still bad get another one etc.

You are never in the driver's seat when you own a factory!

The overall wages workers would be paid aren't even the problem. The administration, laws, unions, taxes etc. are what makes it undesirable to own a factory.

Plus, any slightest mishap or work issue would be on the front pages of all the magazines.

Apple is a smart company , hence no factory in the US!
Score: 1 Votes (Like | Disagree)

Top Stories

calculatorapp

iOS 11 Bug: Typing 1+2+3 Quickly in the Calculator App Won't Get You 6

Tuesday October 24, 2017 2:03 pm PDT by
A bug in the built-in Calculator app in iOS 11 is getting some major attention this week, despite the fact that it's been around since iOS 11 was in beta testing. At issue is a calculator animation that causes some symbols to be ignored when calculations are entered in rapid succession. You can try it for yourself: Type 1+2+3 and then the equals sign into the Calculator app quickly. Due to...
gradiente iphone white

Brazilian Electronics Company Revives Long-Running iPhone Trademark Dispute

Tuesday May 19, 2020 1:06 pm PDT by
Apple has been involved in a long-running iPhone trademark dispute in Brazil, which was revived today by IGB Electronica, a Brazilian consumer electronics company that originally registered the "iPhone" name in 2000. IGB Electronica fought a multi-year battle with Apple in an attempt to get exclusive rights to the "iPhone" trademark, but ultimately lost, and now the case has been brought to...
original iphone

Phil Schiller Says iPhone Was 'Earth-Shattering' Ten Years Ago and Remains 'Unmatched' Today

Monday January 9, 2017 7:15 am PST by
To commemorate the tenth anniversary of the iPhone, Apple marketing chief Phil Schiller sat down with tech journalist Steven Levy for a wide-ranging interview about the smartphone's past, present, and future. The report first reflects upon the iPhone's lack of support for third-party apps in its first year. The argument inside Apple was split between whether the iPhone should be a closed...
iphone 12 colors 2021

iPhone 12 Colors: Deciding on The Right Color

Thursday November 5, 2020 8:35 am PST by
The iPhone 12 and iPhone 12 Pro arrived last October in a range of color options, with entirely new hues available on both devices, as well as some popular classics. The 12 and 12 Pro have different color choices, so if you have your heart set on a particular shade, you might not be able to get your preferred model in that color. iPhone 12 mini and iPhone 12 The iPhone 12 mini and iPhone 12...
iPhone 13 Dummy Thumbnail 2

Full iPhone 13 Feature Breakdown: Everything Rumors Say We Can Expect

Tuesday August 31, 2021 7:50 am PDT by
With the launch of Apple's iPhone 13 lineup believed to be just a few weeks away, we have compiled all of the coherent rumors from our coverage over the past year to build a full picture of the features and upgrades coming to the company's new smartphones. For clarity, only explicit improvements, upgrades, and new features compared to the iPhone 12 lineup are listed. It is worth noting that...
omg lightning cable comparison

Security Researcher Develops Lightning Cable With Hidden Chip to Steal Passwords

Thursday September 2, 2021 6:59 am PDT by
A normal-looking Lightning cable that can used to steal data like passwords and send it to a hacker has been developed, Vice reports. The "OMG Cable" compared to Apple's Lightning to USB cable. The "OMG Cable" works exactly like a normal Lightning to USB cable and can log keystrokes from connected Mac keyboards, iPads, and iPhones, and then send this data to a bad actor who could be over a...
macbook air deals

Deals: Amazon Drops Price of 256GB M1 MacBook Air to New Low of $849.99 ($149 Off)

Friday August 27, 2021 6:16 am PDT by
Amazon today introduced new low prices on the M1 MacBook Air for both 256GB and 512GB storage options. To start, you can get the 256GB model for $849.99, down from an original price of $999.00. Note: MacRumors is an affiliate partner with Amazon. When you click a link and make a purchase, we may receive a small payment, which helps us keep the site running. Only Silver and Gold are...
maxresdefault

New MacBook Pro Models Coming at WWDC, Suggests Leaker

Monday May 24, 2021 1:27 pm PDT by
New MacBook Pro models are coming at WWDC, according to leaker Jon Prosser who has a mixed track record when it comes to predicting Apple's plans. Subscribe to the MacRumors YouTube channel for more videos. Prosser provided no additional information, but there are new 14 and 16-inch MacBook Pro models in the works. The new MacBook Pros will feature the most radical redesign to the MacBook Pro ...
M1X MBP Feature

Leaker: Upcoming MacBook Pro to See Price Hike Over Current Model, Equal Performance Across 14 and 16-Inch Sizes

Tuesday August 24, 2021 5:28 am PDT by
The upcoming 14-inch MacBook Pro is set to be more expensive than the current 13-inch MacBook Pro and both the 14 and 16-inch models will offer the same performance, according to the leaker known as "Dylandkt." The leaker shared the information on Twitter, explaining that both of the upcoming MacBook Pro models, expected to come in 14 and 16-inch sizes, will feature the same performance due...
iPhone 13 Dummy Thumbnail 2

Kuo: iPhone 13 to Feature LEO Satellite Communications to Make Calls and Texts Without Cellular Coverage

Sunday August 29, 2021 7:39 am PDT by
The iPhone 13 will feature low earth orbit (LEO) satellite communication connectivity to allow users to make calls and send messages in areas without 4G or 5G coverage, according to the reliable analyst Ming-Chi Kuo. In a note to investors, seen by MacRumors, Kuo explained that the iPhone 13 lineup will feature hardware that is able to connect to LEO satellites. If enabled with the relevant...