The global shortage of chips has led to difficulties in the supply chain of products in various fields. Now when broadband service providers order Internet routers, they find that the product delivery date is even delayed for more than a year. This makes the industry another victim of chip shortages and brings to millions of people who still work at home More difficult.

According to people familiar with the matter, the delivery period for broadband service operators’ router orders is as long as 60 weeks, more than twice the previous waiting time.

According to Karsten Gewecke, the European business director of router manufacturer Zyxel, the demand for high-performance home broadband network equipment continues to soar. He said that since January, the company has asked customers to order products a year in advance, because since then, the delivery time of Broadcom chips and other router parts has doubled and it takes a year or more.

Zyxel is a major router supplier in the world, and its customers include broadband service operators such as Telenor ASA in Norway and Zen Internet in the United Kingdom.

Adtran, a US network equipment manufacturer, also warned customers that there have been supply chain risks and extended delivery periods in recent months. The company’s spokesperson said in an email that the company has expanded its warehouse facilities in the UK and more than doubled its inventory and logistics capabilities to avoid product shortages.

Gwick said that currently no operator has exhausted the routers in his hands, but the supply chain seems to be tight in the next six months, so this situation is entirely possible. "We have been very tight on the product several times," he said in a video call. "This situation may still happen."

Even goods that are already in transit are facing various problems. According to Gwick, the freighter that stranded on the Suez Canal last week was full of Zyxel routers.

Broadcom did not immediately respond to a request for comment. The company’s CEO Chen Fuyang said last month that 90% of the products in 2021 have been ordered.

Gwick said that the current shortage of silicon wafers and chip supply problems caused by the mismatch of supply and demand have become a bottleneck in the global supply chain. Gwick added that memory and power management components were also affected.

He said: "It's like a snowball effect. Our situation is getting worse and worse." "When I talked to some chipset suppliers, some of them told me that they had overbooked three times the capacity. ."

As chip foundries strive to allocate limited capacity, lower-profit businesses are pushed to the back. The profit margin of routers is often lower than that of smartphones and computers. In addition, some less affluent router markets such as Eastern Europe use components with low precision and low profit margins. Similarly, smaller broadband service operators are the most affected, while major global companies are relying on their purchasing power to compete for product supply.

It is reported that some operators have stockpiled equipment to avoid shortages. Some companies have ordered equipment that can last for several months before the trade disruption caused by Brexit, thereby further avoiding the impact. (Chenchen)

Source: NetEase Technology Report, translated by Google Translate