scene from Foxconn explosion

According to the WSJ, Foxconn has suspended production across many of its plants in China for two days while the government investigates the explosion that killed three people and injured many more.

Hon Hai Precision Industry Co., a Taiwan-based company better known by the trade name Foxconn that operates dozens of factories across China, said it closed all of its workshops that handle polishing for electronic parts and products pending further inspections.

At issue appears to be the flammable aluminum dust that comes from polishing parts like the iPad 2’s aluminum back.  A student group out of Hong Kong called Sacom published a report on the dangers of flammable airborne aluminum dust in a report on May 6, saying workers complained about inhaling the dust and about poor ventilation. It isn’t clear whether the workshops referred to in Sacom’s report include the site of the accident.

The news is another setback for Foxconn, which is barely past a recent outbreak of public suicides.

Should the Chengdu production capacity not be restored anytime soon, Hon Hai may have to hire more expensive labor in Shenzhen, said Arthur Hsieh, an analyst at UBS.

While Foxconn has dominated the contract manufacturing industry until now, analysts say Hon Hai competitors like Singapore’s Flextronics Inc. and Taiwan’s Quanta Computer Inc. could try to woo some of its customers, including Apple.

The prospective plant closures and their affect on Apple’s iPad were assessed by Digitimes earlier today

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