Analyst: Foxconn explosion could hit iPad 2 production

Two people have been killed and 16 injured after an explosion occurred at a Foxconn manufacturing plant in China.

The explosion, which happened on Friday evening, took place at a subsidiary of large manufacturing company Foxconn in Chengdu, China and could have knock-on effects on the production of iPad 2s. Foxconn is known to be Apple's prime contractor for the manufacture of its consumer electronics hardware.

Mike Abramsky, an analyst from RBC Capital who specialises in Apple, released a note on Friday in which he wrote that the manufacturing plant is one of two key sites for the production of Apple's iPad 2 tablet, according to "http:="" tech.fortune.cnn.com="" 05="" what-the-foxconn-explosion-means-for-apple="" "="">CNN Money. The Chengdu plant was opened in October to boost Foxconn's manufacturing capacity at a purported cost of $2bn (£1.23bn).

Abramsky envisaged two ways the event could affect Apple. He believes that if Chengdu was the prime site for iPad 2 manufacture then stoppage of the plant could crimp production of iPad 2s by between 1.8m and 2.8m units in Apple's third financial quarter.

However, if the bulk of iPad 2 production still occurs in Shenzhen, or the plant damage isn't to severe, then the shortfall will be around 1m units, he wrote.

The cause of the explosion is being investigated, Chinese's state-backed news service Xinhua reported.