Router makers face the same chip shortage that automakers endure as tech companies grapple with supply disruptions.

Broadband providers see delays of over a year in ordering internet routers, becoming yet another victim of chip shortages that are choking global supply chains and adding challenges for millions of people still working home.

Carriers have been given order times of up to 60 weeks, which has more than doubled previous expectations, according to people familiar with the matter, who asked not to be named because the discussions are private.

The coronavirus manufacturing shutdowns marked a year ago have been exacerbated by a prolonged increase in demand for better broadband equipment for the home, said Karsten Gewecke, head of European regional operations at Zyxel Communications Corp, a router maker. based in Taiwan. Since January, customers have been asked to order products a year in advance, he said, as the lead time for components like the Broadcom Inc. chips has doubled to a year or more since then.

Zyxel is a major supplier of routers, with customers such as Telenor ASA in Norway and Zen Internet in Great Britain.

Adtran, a U.S. network equipment maker that is reclaiming market share from Chinese firm Huawei Technologies Co. in Europe, has also warned customers of supply chain risks and lead time extensions these last months. It has expanded its warehouses in the UK, more than doubling its inventory and logistics capacity to avoid problems, a spokesperson said via email.

No carrier has yet completely run out of routers, but the supply chain looks strained for the next six months, so it’s possible, according to Gewecke. “We have been very close a number of times,” he said on a video call. “It could still happen.”

Even shipments already underway cannot escape global trade rents: Last week, Zyxel routers were on and behind the Evergreen ship that was blocking the Suez Canal, according to Gewecke.

Broadcom did not immediately respond to requests for comment. About 90% of its 2021 supply has already been ordered, CEO Hock Tan said last month.

[Bloomberg]

Zyxel’s troubles started over a year ago when manufacturing at its factory in Wuxi, China was shut down for a month due to Covid-19. Since it reopened, supplies have been erratic and shipping costs have climbed up to ten times from previous levels as exporters scrambled to catch up, even competing for space with medical equipment. and outgoing personal protection.

Since the restart of Chinese factories, chipsets have become a global bottleneck, choked by shortages of parts like silicon wafers as well as mismatches between supply and demand. Components of other systems such as memory and power management are also affected, Gewecke said.

“It’s a snowball effect that we are pushing ahead of us, and the situation since then has only gotten worse, worse and worse,” said Gewecke. “When I talk to some chip vendors, some of them tell me that they have something like 300% overbooked capacity.”

As semiconductor foundries find it difficult to allocate limited capacity, less profitable jobs are pushed to the end of the line. Routers have lower margins than smartphones and computers, and then in the router world, those aimed at less wealthy markets like Eastern Europe use less sophisticated, lower margin parts. Similarly, small telecom operators have been hit the hardest, while global companies have sourced their purchasing power.

Some carriers have formed to avoid shortages, and some have been further isolated by ordering months of equipment before possible Brexit trade disruptions.





Source link

By ADMIN

Leave a Reply

Your email address will not be published. Required fields are marked *

error: Content is protected !!