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Supply issues persist for Apple weeks after disaster in Japan


More than a month after a deadly earthquake and tsunami struck Japan, the longterm effects on Apple's supply chain are becoming clearer, with report characterizing them as "significantly damaged."

Japan's supply of components for the iPad 2 remains greatly affected by the disaster, DigiTimes reported Wednesday. Apple has reportedly shifted orders for iPad 2 connectors to Taiwan's Cvilux.

Previously, Apple depended on Japan's Hirose Electric for most of its iPad 2 connectors. But since the tsunami and earthquake, Japan has had a power brownout policy that left the company unable to meet demand for Apple.

As a result, Apple has instead turned to Cvilux for iPad 2 connectors, industry insiders reportedly said. The major order from Apple is expected to boost Cvilux to greater profitability.

In March, a report from Wall Street analyst Gene Munster of Piper Jaffray said that the disaster in Japan had not "meaningfully impacted" Apple's iPad 2 supply. Wednesday's latest report of connectors being secured from Taiwan could suggest that Apple has sidestepped potential issues from the disaster, turning elsewhere for components to keep building more iPad 2 units.

Other key iPad 2 components said to come from Japan include NAND flash from Toshiba Corp, DRAM from Elpida Memory Inc., an electronic compass from AKM Semiconductor, touchscreen overlay glass believed to be from Ashai Glass Co., and system batteries from Apple Japan Inc.

Apple has also reportedly become more aggressive in securing components since the disaster in Japan. One report earlier this month claimed that Apple was offering upfront cash payments to suppliers in order to secure components. It was also said that Apple was willing to agree to price hikes for components to ensure supply.

Demand for the new iPad 2 continues to outweigh supply, though Apple continues to expand retail availability of its second-generation touchscreen tablet. Just this last week, the device went on sale at some locations of U.S. retailer Toys R Us, and the iPad 2 is also expected to go on sale in Hong Kong, Korea and Singapore this month.