By Star Chang, posted Jan 14, 2012 at 6:13 PM, 928 views,

Labor Compensation Dispute May Delay New iPad Delivery

Taiwan-based electronics manufacturer Pegatron, the secondary supplier for Apple, has become entangled in a labor dispute over compensation following an explosion last month in Shanghai factory. The dispute is expected to delay the delivery of the new iPad 3 (model name not confirm yet), the third generation of Apple’s popular tablet computer …

Workers which have injured in the explosion at the Pegatron factory mainly produces Apple’s iPad 2. The explosion was caused by backlogs on the production of iPad 2s, which led to the mishandling of combustible dust, the cause of a similar explosion that happened at Foxconn’s Chengdu factory. They injury workerd will need to take leave of more than 18 months before they are able to return to work. Those injured in the incident have demanded compensation from Pegatron, but have not been satisfied. Pegatron had offered 5,000 yuan (US$790) to employees seriously hurt in the explosion. The factory is expected to restart production on Jan. 18.

The Taiwan-based contractors Foxconn and Pegatron have reportedly received orders from Apple and are responsible for 85% and 15% of the manufacture of the devices respectively. Foxconn is still Apple primary supplier for both iPad and iPhone but Apple is changing their manufacturing strategy. Apple would slowly shift its iPad orders from Foxconn to Pegatron while Foxconn would still be the prime partner for iPhone manufacturing. The new strategy would be decrease risk and increase the quality of Apple products. In future, Foxconn would only manufacture iPhones and Pegatron would only manufacture iPads for Apple.

The next generation of iPad from Apple is reportedly already in production for a launch in early March. Foxconn has already arranged its iPad production line to have less holiday during the Chinese Lunar New Year, in order to meet the demand of the new iPad’s announcement in February. Pegatron might want to beat Foxconn to obtain a significant number of orders for the new iPad, but their plants in China seem to have problem on assembly process and safety issues.

Source: 21cbh (in Chinese), WantChinaTimes, supplychain