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Apple Experiencing Mass Production Issues with iPad Mini

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Earlier this month we reported that some of the Hon Hai production problems were likely due to supply chain problems. It now appears that the problems could be far beyond the iPhone 5. According to a new report published by DigiTimes, part suppliers in Apple's supply chain will reportedly have to wait until the first quarter of 2013 to see their revenues bump up as the result of Apple's newly released iPad mini and 21.5- and 27-inch iMac due to mass production issues with the products, according to industry sources. Report Updated 7:20 AM MST


The report goes on to state that "mass production of panels used in the iPad mini has reportedly suffered low yield rates, and backlight module providers have also had a shortage of supplies, which is affecting the amount of iPad minis that can be shipped in 2012, said the sources."


The sources said AU Optronics (AUO) and LG Display (LGD) provide panels for the iPad mini and that AUO is having mass production issues. This has caused the overall shipment proportion of AUO panels used in the iPad mini to drop to about 22%, down from AUO's original 40% target, added the sources.


While LGD is capable of providing sufficient panels for the iPad mini, AUO has had difficulty improving its production yields of 7.9-inch panels used in the new device, the sources pointed out.


Apple is said to have set a ten million shipment target for the iPad mini for the fourth quarter of 2012, but might only reach six million during the period largely as a result of production delays at AUO, said the sources.


LGD and AUO have both been pinpointed as the main display suppliers for Apple's iPad mini, which was announced in October, the sources indicated. About four million panels were shipped for the iPad mini in November, the sources said. And judging from shipments thus far, LGD is still supplying most of the panels for the iPad mini, the sources observed.


A recent IHS iSuppli report indicated that any display manufacturing and yield issues could impact the availability of the iPad mini for the remainder of 2012. The research firm identified AUO as the new supplier.


Although the report states that iMac shipments will down due to production issues,  Apple's CEO Tim Cook had mentioned this during their last Financial Conference Call:


"In terms of general shortages on the iMac, we’ll be constrained for the full quarter in a significant way, part of that is that we’re beginning shipping the 21.5-inch iMac in November and the 27-inch in December. And so there will be a short amount of time during the quarter to manufacturer and ramp those and I expect the demand to be robust. So we will have a significant shortage there."


Apple Asks AU Optronics to Suspend Supply of iPad Mini Panels Due to Defects


Update 7:20 AM MST: According to BrightWire, a Taiwanese website called Cnyes is reporting this morning that "panels provided by AU Optronics (AUO) for Apple's iPad mini have defects, including yellowy and cloudy images, and Apple has asked the company to suspend supply of the panels.



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Sources: One, Two and Three.



This is interesting. When iFixit did a tear-down of the iPad mini, it had a Samsung display panel in it. So Samsung must be making some of the displays. This is one area where Apple needs Samsung.

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