Global Chip Shortage Leads to Extended Lead Times

Rowell Dionicio

There’s a long-lasting impact of the pandemic across all sectors: automative, game consoles, network switches, and Wi-Fi access points. All electronics. The global shortage of semiconductor chips is putting a tight strain on supply and driving up the demand.

If you’ve asked for a quote on network equipment and have gotten a long lead time, that is because of COVID-19 disrupting the supply chain and impacting processor plants. Today, there’s a limited supply of semiconductors.

The bad news is that it is likely to extend into 2022. Vendors such as Cisco, Meraki, Juniper, and others estimate a 12 to 18-month impact on availability. In a letter from Juniper Networks, CFO Commentary on First Quarter 2021 Preliminary Financial Results, “There is a worldwide shortage of semiconductors impacting many industries. Similar to others, we are experiencing ongoing supply constraints which have resulted in extended lead times.”

At Packet6, we’ve seen 90+ days lead time for Meraki switches, firewalls, and access points. Resellers are updated weekly on lead times.

How Are You Impacted

The chip shortage will impact your 2021 and 2022 project timelines. The supply and demand issue will increase network equipment prices and availability.

During Cisco’s fiscal Q3 2021 earnings call, CEO Chuck Robbins revealed that the company had decided to increase the price of certain products. Which ones will have price increases? Most likely, Wi-Fi products, maybe even the whole portfolio.

It doesn’t end with network equipment. The shortage will impact mobile devices and possibly warehouse scanners. “Due to the global semiconductor shortage, we are also experiencing some production disruption around certain set products and displays,” said Ben Suh, EVP of Samsung’s investor relations.

The consequences of improper planning and design will lead to purchasing of hardware and software at higher costs. Our recommendation is to expedite your current network projects by focusing on the planning and design phase.

With an accurate bill of materials, you can place an order with confidence and work on the next project while inventory is replenishing orders.

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