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Foxconn Explosion and Chinese Scolding Could Have Apple Shifting Production
May 26, 2011
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The word's biggest consumer electronics contract manufacturer, Hon Hai Precision Industry, known primarily under its trade name Foxconn, suffered an explosion at its factory making Apple iPads. The explosion was caused by combustible dust in a polishing workshop, Foxconn said. The company closed the polishing lab at its Chengdu, China, plant, where the explosion occurred, as well as similar labs at other plants in China.

Foxconn manufactures iPads and iPhones for Apple as well as products for HP, Sony, Cisco, Dell, and numerous other consumer electronics companies. Foxconn is estimated to have more than 1 million employees at its 12 massive manufacturing facilities in China.

The government of China made an official announcement saying that Taiwanese companies operating in mainland China should improve their safety measures. It was an unusual move by China, which almost never publicly chides Chinese companies on worker safety issues, despite longstanding claims of endemic occupational safety problems in Chinese plants. The move was apparently intended by China as way of flexing its muscles - the PRC has complicated relationships with Taiwanese companies that manufacture in mainland China. Indeed, the public scolding will likely give Apple further motivation to diversify the manufacturing of its products among a wider array of contract manufacturers.

Apple is already under struggling to keep up with demand for the iPad 2 and the iPhone.

The company has seen increased sales of its Mac computers, as well. Industry watchers say the popularity of cloud computing makes the computer operating system less a barrier to computer interoperability, meaning that computer buyers feel less obliged to buy a PC running a Windows OS. The result is increased sales of Apple computers running the Mac OS.

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