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iPad 2 Supply Problems Loom: IHS iSuppli

3/18/2011 10:15:25 AM Eastern
New York - The multiple disasters now rocking Japan could cause component supply problems for Apple's iPad 2, according to IHS iSuppli.

A teardown analysis of the device identified at least five parts sourced from Japanese suppliers, including difficult to replace components such as the electronic compass and the ultra-thin lithium-ion battery manufactured only by Apple Japan, an Apple subsidiary.

"Typically, battery cells are made at the site of assembly but because the iPad 2's lithium-ion polymer battery is unusually thin, it likely requires advanced battery cell manufacturing technologies that reside in Japan," said Wayne Lam, senior analyst, competitive analysis, at IHS iSuppli.

Logistical disruptions may mean that Apple could have difficulties obtaining this battery, and it may not be able to secure supply from an external, non-Japanese source.

Other Japan-manufactured components include the iPad 2's NAND flash made by Toshiba, DRAM from Elpida Memory, the e-compass from AKM Semiconductor and the touchscreen overlay glass from Asahi Glass.

"While some of these suppliers reported that their facilities were undamaged, delivery of components from all of these companies is likely to be impacted at least to some degree by logistical issues now plaguing most Japanese industries in the quake zone. Suppliers are expected to encounter difficulties in getting raw materials supplied and distributed as well as in shipping out products. They also are facing difficulties with employee absences because of problems with the transportation system. The various challenges are being compounded by interruptions in the electricity supply, which can have a major impact on delicate processes, such as semiconductor lithography," the report said.

These issues may come at a time when Apple is rushing to ramp up iPad 2 production to meet stronger-than expected demand for the device. The company this week announced that iPad shipments from the Apple Store have been delayed by one week from previous lead times because of the surge in demand.

For IHS iSuppli's complete Apple iPad 2 teardown, see: New Generation Apple iPad 2 with A5 Processor.

 
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