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Report: Parts, labor shortages to impact iPads, iPhones

The iPad 2 is already hard to come by, and according to a new report it might get even harder to get one in the coming months due to component and labor shortages.


A shortage of both components and labor at one of Foxconn Electronics' major factories, along with a growing, industry-wide component drought due to the Japanese earthquake and tsunami, could have a marked impact on the production of Apple's iPad 2 and iPhone 4, a new report claims.

Digitimes writes that Foxconn's production facility in Chengdu, China--which makes iPad 2 units for Apple as well as gadgets for other manufacturers--is currently experiencing a shortage of both components and labor. This is reportedly making a dent in the company's overall production, which the outlet pegs at 2.5 million to 3 million iPad 2s a month.

Nonetheless, a Foxconn representative told the outlet that it was working hard to meet client demands. The majority of iPad 2 production is said to take place in Foxconn's facilities in Shenzhen, China.

Component supply issues are also said to be impacting a number of major manufacturers, specifically around mobile phones and tablets. Citing its own sources, Digitimes says manufacturers have been working "behind the scenes" to stock up on inventory ahead of any shortages.

"Sources from upstream component players have pointed out that Asustek Computer, Acer, Motorola, Apple, High Tech Computer (HTC), Quanta Computer, and Compal Electronics have all recently started acting aggressively in securing supplies" of printed circuit boards and touch screen cover glass due to warning signs of shortages, the latter report says.

During Apple's most recent quarterly earnings call, Apple COO Tim Cook noted that the company was sourcing hundreds of components from Japan that were "several layers back in the supply chain," and that the company did "not anticipate any material supply or cost impact" in its third fiscal quarter, which ends in June. Cook said there were risks beyond that timeline, but that "there's no issue that we're aware of today that we view as unsolvable."