Foxconn Workshops Resume iPad Production; Boy Regrets Selling Kidney to Buy One

From Shanghai Daily:

A 17-year-old student in Anhui Province sold one of his kidneys for 20,000 yuan only to buy an iPad 2. Now, with his health getting worse, the boy is feeling regret but it is too late, the Global Times reported today.

“I wanted to buy an iPad 2 but could not afford it,” said the boy surnamed Zheng in Huaishan City. “A broker contacted me on the Internet and said he could help me sell one kidney for 20,000 yuan.”

On April 28 Zheng went to Chenzhou City in neighboring Hunan Province for the kidney removal surgery arranged by the broker. His parents knew nothing about it, Zheng said. He was paid 22,000 yuan after his right kidney was taken out at the Chenzhou No. 198 Hospital.

Meanwhile, the Wall Street Journal reports that production has resumed at workshops run by iPad manufacturer Foxconn, following a temporary closure in the wake of a fatal explosion at the plant.

In a written statement Thursday, Hon Hai spokesman Louis Woo said the company has made a number of improvements in its workshops because the blast “was likely due to an explosion of aluminum dust in a ventilation duct.” The blast at a Hon Hai facility in Chengdu, China, last month killed three people and injured 15.

Mr. Woo said the workshop changes, which follow a “detailed and thorough review of all related safety policies and procedures,” include improved ventilation and an overhaul of dust-disposal practices ….

Hon Hai, which makes Apple iPads and other products and is the world’s biggest contract electronics manufacturer by revenue, had closed the workshops amid the investigation into the blast. The workshops handle polishing for electronic parts and products.

Because of Hon Hai’s size, some analysts had worried about what impact the closures might have on the global electronics-supply chain for items such as cellphones, tablet devices and videogame consoles. In addition to Apple, Hon Hai, which reported more than $80 billion in revenue last year, also makes products for companies such as Hewlett-Packard Co., Sony Corp., Dell Inc. and Nintendo Co., analysts said.

The real impact of the closure on supply chains remains unclear, as MacStories reports:

Closing the factory led several analysts to believe the worldwide supply chain could suffer a major impact, with Apple losing 500,000 iPad units. Others suggested Foxconn’s Shenzen factory would pick up all missed production from Chengdu, though it wasn’t clear whether Foxconn shifted the production of some components and devices to other facilities or not. The Chendgu plant was said to account for 30% of all iPad production, though as reported by All Things Digital Ticonderoga Securities analyst Brian White believes production issues may be related to overall supply chain shortages, rather than damages from the explosion itself:

Therefore, the explosion in Chengdu may result in more of an equilibrium situation with certain component vendors, rather than a shortage situation. Netting this all out, we believe the production of iPad 2 will be supply constrained during the June quarter; however, we are not prepared to place the bulk of the blame on the Chengdu operation.

China Real Time Report quoted Acer President Jim Wong on the risk of long-term supply chain disruption by the Japanese earthquake and tsunami:

This “really is a big disaster because it’s after the financial crisis,” Mr. Wong said in an interview on Wednesday. Companies used to be “so good at risk management,” having multiple factories around the world to distribute risk, but after financial crisis “a lot of people started downsizing.”

Mr. Wong did not name the suppliers that have been sources of concern, but said Acer was surprised to find that one company which had a good reputation in risk management reported having only one factory manufacturing one of its components because the financial crisis forced it to close its other facilities.

For the moment, Mr. Wong said component supplies are sufficient because companies often store several weeks of extra inventory. But inventory for certain components or materials, including resin and touch sensors, could run out in July, he said, at which point problems may arise. “To be honest, everybody is so cautious now,” he said. “Entering July, we will know better” because after June, Acer and other companies will be counting “on real output from factories.”