A long chain of factors is heavily impacting router production and Internet Service Providers are already worried about the possible consequences.
Chips for routers are in short supply and now Internet subscriptions are at risk. A year has passed since the beginning of the so-called “chip crisis” that has hit the world of technology but, up to now, the situation concerning the supply of components does not seem to want to return to the levels of before the pandemic.
Delayed times, blocked productions, difficult logistics because of the coronavirus and routers that disappear quickly from the stores: better to keep your own tool if you do not want to risk to find yourself without it in the moment of need. This is the situation that is looming in the IT and consumer electronics sector, after a crisis that has already hit the world of computers, desktops and laptops, and smartphones. The chips, or rather the materials with which they are made, are scarce and the device manufacturing companies are struggling to find the necessary components to make the finished products to be distributed on the market. But what is the current situation? We are talking about long times: 60 weeks, more than a year, to be able to put our hands on the chips required by almost all electronic devices.
Chips for routers, what is the situation?
The adoption by many companies and professionals of smart working has inevitably given the coup de grace to an area already tried by the pandemic. In fact, the spread of the coronavirus has pushed more and more workers to carry out their daily tasks from home, with the need to upgrade their devices dedicated to broadband not being able to count on the means for connecting to the internet, often more advanced, normally available in offices.
Needing a faster connection at home, then, many have scrapped the old ADSL in favor of fiber optics. But routers for this technology are different and, as a result, there has been a sudden demand at a time that was already not easy for the electronics bigwigs.
Many of the companies currently in the mix, such as one of the largest Taiwan-based router manufacturers, Zyxel, confirm this. And it was the company’s head of European affairs, Karsten Gewecke, who pointed out in an interview with Bloomberg that the situation is becoming completely untenable. Already since January, the manufacturer has started asking its customers to place their orders a year in advance, in line with the time required by manufacturers to produce the required components.
The same happened to Adtran, a U.S. company engaged in the network equipment sector that has decided to double its facilities in the UK in order to count on more space to dedicate to logistics and avoid any eventual shortage in the distribution network. Although there are still no situations of total lack of routers, the bomb could still explode; “We’ve been very close several times,” confirmed Gewecke in his video interview.
Routers, who pays the consequences
And then, there are external factors such as the blockage of the Suez Canal to put on hold an economy already tested by the pandemic crisis, as happened in previous weeks. Yet, in spite of the restart of Chinese factories, the chip shortage has slowed down – if not stopped completely – the production of routers, together with the difficulty in finding memory banks and components for the power supply of the devices.
Semiconductor foundries can’t keep up the pace, with bookings exceeding 300% of the normal production and routers, the last link of the production chain driven by more expensive devices such as smartphones and computers, pay the consequences at a high price.
And it is mainly the smaller operators who suffer the most, without the possibility to put aside stocks of products to exploit in lean situations as done by the most important players in the sector in order to ensure internet subscriptions to all customers.
So we have to wait for an improvement in the situation of the entire production chain in order to see a general change of course, hoping that this will happen soon so that it will not affect other tools that, by now, have become part of everyday working life.