Broadband providers are seeing delays of more than a year when ordering Internet routers, becoming yet another victim of chip shortages choking global supply chains and adding challenges for millions still working from home.
Carriers have been quoted order times as long as 60 weeks, more than doubling previous waits, said people familiar with the matter, who asked not to be named because the discussions are private.
Sharp COVID-19 manufacturing shutdowns a year ago were exacerbated by a prolonged surge in demand for better home broadband equipment, said Karsten Gewecke, head of European regional business for Zyxel Communications Corp (合勤), a Taiwan-based router-maker.
Photo: Ann Wang, Retuers
Since January, it has asked customers to order products a year in advance, because the lead time for components such as chips from Broadcom Inc had doubled to a year or more since then, he said.
Zyxel is a major supplier of routers, with customers including Norway’s Telenor ASA and Britain’s Zen Internet.
Adtran, a US network equipment maker picking up market share from China’s Huawei Technologies Co (華為) in Europe, has also warned customers of supply chain risks and lead-time extensions in the past few months.
It has expanded its warehouse facilities in the UK, more than doubling its inventory and logistics capacity to avoid problems, a spokesman said by e-mail.
No carrier has run out of routers yet, but the supply chain looks strained for the next six months, so it is possible, Gewecke said.
“We have been very close several times,” he said in a video call. “It could still happen.”
Even shipments already en route cannot escape global trade ructions: Last week, Zyxel routers were on and behind the ship that blocked the Suez Canal, Gewecke said.
Broadcom did not immediately respond to requests for comment. About 90 percent of its supply for this year has already been ordered, CEO Hock Tan (陳福陽) said last month.
Zyxel’s problems started more than a year ago when manufacturing in its Wuxi, China, factory shut down for a month due to COVID-19. Since it reopened, supplies have been spotty and shipping costs have spiked as much as 10 times their previous levels as exporters raced to catch up, even vying for space with outbound medical and personal protective equipment.
Since Chinese factories restarted, chipsets have become a global bottleneck, choked by shortages of parts like silicon wafers as well as supply-demand mismatches.
Components for other systems such as memory and power management are also affected, Gewecke said.
“It’s a snowball effect that we’re pushing in front of us, and the situation since then has just become worse and worse and worse,” he said. “When I talk to some of the chipset vendors, some of them tell me that they have something like overbooking of 300 percent of their capacity.”
With semiconductor foundries struggling to allocate scarce capacity, less profitable work gets pushed to the back of the line. Routers command lower margins than smartphones and computers, and then within the world of routers, those destined for less affluent markets like eastern Europe use less sophisticated, lower-margin parts.
In a similar vein, smaller telecoms have been worst hit, while global enterprises have clinched supplies with their buying power.
Some carriers have stockpiled to avoid shortfalls, and some were further insulated by ordering months’ worth of equipment ahead of potential Brexit trade disruptions.
SPECULATION: The integrated house and land transaction income tax has been amended as the real-estate market heats up because of high liquidity and low interest rates Lawmakers across party lines yesterday agreed to July 1 as the provisional date on which a draft amendment to the Income Tax Act (所得稅法) is to come into effect, with the aim of curbing real-estate speculation. The consensus was reached following interparty negotiations at the legislature’s Finance Committee to determine when revisions to the “integrated house and land transaction income tax” would take effect. The committee on Monday last week passed a number of revisions to the act, but failed to agree on when they would take effect. Under the proposed revisions, the tax would be set at 45 percent
Several hundred people have already booked their tickets and begun training for a spectacular voyage: a few minutes, or perhaps days, in the weightlessness of space. The mainly wealthy first-time space travelers are preparing to take part in one of several private missions which are preparing to launch. The era of space tourism is on the horizon 60 years after Soviet cosmonaut Yuri Gagarin became the first person in space. Two companies, Virgin Galactic and Blue Origin LLC, are building spacecraft capable of sending private clients on suborbital flights to the edge of space lasting several minutes. Glenn King is the director of
TAICHUNG PLANT: An official said that generator No. 3 had been retrofitted and it generates 0.46g of particulate pollution per kilowatt-hour, down from 0.6g to 0.7g A spike in demand for electricity made it necessary to restart the third coal-fired generator at the Taichung Power Plant, Taiwan Power Co (Taipower, 台電) said yesterday as a feud with the Taichung City Government lingers. Taichung Mayor Lu Shiow-yen (盧秀燕) has sought to keep the generator from being used. In 2019, he revoked Taipower’s license to operate the generator. However, the state-run utility has taken the city government to court over the license revocation and won the case in February last year, Taipower manager Chang Ting-shu (張廷抒) said. “We would like to remind the Taichung City Government that operation of the third
Broadband providers are seeing delays of more than a year when ordering Internet routers, becoming yet another victim of chip shortages choking global supply chains and adding challenges for millions still working from home. Carriers have been quoted order times as long as 60 weeks, more than doubling previous waits, said people familiar with the matter, who asked not to be named because the discussions are private. Sharp COVID-19 manufacturing shutdowns a year ago were exacerbated by a prolonged surge in demand for better home broadband equipment, said Karsten Gewecke, head of European regional business for Zyxel Communications Corp (合勤), a Taiwan-based