updated 01:15 pm EDT, Fri April 15, 2011
Exact device unknown
One of Apple's supplier partners, Cirrus Logic, recently encountered manufacturing problems with an "audio device" that went into mass production last month, according to Dow Jones. Cirrus says that an earlier test for one of the product's functions was flawed, and that a newer one found fewer working chips than anticipated, with losses rising as production volume increased. "The semiconductor industry is inherently an extraordinarily complicated business, and while we strive at all times to have zero issues, from time to time, and despite everyone's best efforts, 'stuff happens,'" explains CEO Jason Rhode.
The executive goes on to call the problem "unfortunate," and state that Cirrus' top priority was to avoid preventing a successful launch for the client in question. "We believe that we have been successful in that regard," he adds. The company expects to show lower profit margins in the March quarter as a result, and a "smaller residual impact" in the next two quarters.
While Cirrus has avoided mentioning the name of the client, the company is generally believed to be Apple, in part because Cirrus is known to produce components for devices such as iPods and iPads. The launch mentioned by Rhode may be the iPad 2, which shipped on March 11th. Capstone Investments analyst Jeff Schreiner suggests that Apple may also have been ramping up "other devices we haven't heard of yet."