By Philip Elmer-DeWitt
May 20, 2011

Much smoke and confusion in Chengdu, China. Apple shares take a hit

At 7:20 p.m. local time Friday, according to preliminary reports out of China, an explosion struck a Foxconn plant in Chengdu that produces iPad 2s for Apple (AAPL).

The Chinese website M.I.C. Gadget passed along this first-hand report:

Ji Qing Ling’s weibo said: “the explosion occurred in the A05, at 7 pm, the explosion caused many materials casted out from the building, and there are at least hundreds or more of workers inside the building. The whole building did not collapse yet, I do not know what is going on inside. Now there are more than 10 fire engines, 10 ambulances, many police cars.”

At last report, confirmed by the government news agency and Foxconn, two people were dead and 16 injured, three seriously.

Taiwan-based Foxconn is the world’s largest electronics manufacturer, assembling finished products for most major U.S. computer companies. It is Apple’s largest supplier, and the facility at Chengdu is believed to be one of the two main plants where iPad 2s are assembled. The site of the explosion was described by the government news agency as a “polishing plant.”

According to the
Wall Street Journal
, local authorities have ruled out foul play, saying that the explosion did not have a “human factor.”

Apple’s shares dropped sharply when news of the explosion crossed the wires. For an assessment of the near-term implications for Apple’s earnings, see here.

Below: Video of the chaotic scene in the street outside the factory.

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Vodpod videos no longer available.

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