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Taiwanese industry publication Digitimes reported Tuesday that Foxconn Electronics, the trade name of Hon Hai Precision Industry, has started "mass production" of the iPad at its new plants in Chengdu. The production lines can only build about 10,000 units each day, or about 300,000 iPads per month.
Foxconn began shipping iPads from the site this month, and production capacity is only expected to grow over time. The report said that the new Chengdu plants are expected to become "a major supply base" in the first quarter of 2011.
Apple's manufacturing partner has been looking to move its production plans to inland China to reduce costs. Labor is cheaper and land costs are reduced further inland, and just last week some workers in Foshan, China, were protesting Foxconn's plans to move factories inland.
Foxconn reportedly has big plans for its Chengdu factories, with about 50 iPad production lines to be set up there. When the maximum capacity at the plants comes online, it will be able to produce about 40 million iPads per year.
Currently, most iPads are produced in Shenzhen, where about 2.5 million units maximum can be built each month. iPad shipments in the fourth quarter could top 7 million, bringing total 2010 sales to 15 million, sources indicated.
The report also reiterated that Apple's second-generation iPad is expected to launch in the first quarter of 2011. Digitimes said that Foxconn Precision Component and Foxlink will be component suppliers, while Chimei Innolux is expected to supply panels for the device.