Foxconn is shutting down its Chengdu, China manufacturing plant in the wake a large explosion last Friday that killed three people as analysts disagreed as to whether the incident would slow the production of Apple's iPad tablets.
Hon Hai Precision Industry subsidiary Foxconn, which assembles Apple's iPads, iPhones and iPods, said Monday that is suspending operations at the facility in southwestern China for a week as it conducts a safety inspection.
Earlier Friday, a Hong Kong-based worker advocacy group alleged that Foxconn, Apple and other customers of the contract manufacturer had not pushed through promised workplace safety improvements at the Chengdu plant, leading to an explosion linked to combustible "ultra-light" aluminum dust.
The explosion, which injured more than a dozen people in addition to the three fatalities, is believed to have occurred in the area of the facility where the aluminum cases for the iPad 2 are polished.
Meanwhile, analysts were mixed as to whether the production of the iPad 2 would be disrupted by the incident and investigation.
About 25 to 30 percent of Apple's iPad 2 media tablets are produced at the damaged Chengdu plant, according to one analyst. But Brian White, managing director of Ticonderoga Securities, said Hon Hai would simply shift production of the iPad 2 to its Shenzhen facility to prevent any supply chain issues for Apple.
Research firm HIS iSuppli, however, said Monday that the blast could lead to a production loss of half a million iPad 2 tablets in the second quarter of 2011.
Hon Hai chairman Terry Gou has said that the explosion would not cause production delays for the iPad 2.
Incidents at Foxconn's mainland China manufacturing plants have been a source of controversy in recent years for Hon Hai and its high-profile customers. A string of worker suicides put the spotlight on working conditions and pay rates at Foxconn's Shenzen plant, which houses some 420,000 employees inside the factory complex.
Foxconn and its partners pledged to make a number of reforms at the manufacturer's facilities in the wake of negative attention over the suicides.
But Hong Kong-based advocacy group Students & Scholars Against Corporate Misbehavior (SACOM) alleges that promised improvements to pay scales and safety measures at Foxconn facilities have not happened.