Taiwan-based electronics manufacturing service provider Foxconn Electronics (Hon Hai Precision Industry) is facing a shortage of both labor and materials at its plants in Chengdu, China, which is likely to affect shipments of iPad 2 and iPhone 4 orders in the second quarter, reports "DigiTimes" (http://www.digitimes.com), quoting "sources from upstream component makers."

Apple sold 18.6 million iPhones in the first quarter of 2011. That's up 14.9% from 16.2 million units in the fourth quarter of 2010. However, as Apple estimates sales of 20-22 million iPhones in the second quarter of 2011 with a sequential growth over 7%, its demand for more shipments has started to give its upstream assembly partners, Foxconn and Pegatron Technology stronger pressure, the article adds.

As for Foxconn's plants in Chengdu, which are used mainly for iPad 2 manufacturing, although the company planned 52 production lines at the plants for manufacturing iPad with annual capacity already surpassing 40 million units, as Japan's earthquake seriously impacted component supplies such as power amplifiers and memory to the plants, while the plants' labor is also falling short, supplies of iPad 2 are still mainly from its plants in Shenzhen, says "DigiTimes." As a result, Foxconn may have difficulty in satisfying Apple's demand for supplying an average of 2.5-3 million units of iPad 2 each month in the second quarter.