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Overcoming chip shortage: Discover how Telcos can overtake this crisis

Chips Shortage in Telco Industry

Chip shortage is a real thing, and it’s expected to remain in the next months of 2021, which will result in scarcity of components and an increase of its prices.
The semiconductor shortage is a problem that is affecting all sectors and telcos are not an exception, since manufacturers and operators are cutting or even stopping their activities.

For that reason, here is an in-depth research that culminated in a solution to help you overcome this crisis.
Find out what it is in this article.

Why is happening a chip shortage and what are the implications of it?

With people being forced to work and study from home due to the coronavirus pandemic, there was an increase in demand of electronics. Consequently, people are more connected than ever and the need of building and upgrading networks and data centers emerged.

But this is not the only reason. The increase need of semiconductors in cars and specially in electric cars and the US banning of Huawei and its products are also part of this crisis.

On resume, these set of factors resulted in a chip shortage that is constraining worldwide production of electronics and related equipment’s and the consequent access to the produced products, which is now alerting all industries and governments to a big crisis.

“The Semiconductor Industry Association said in December that global chip sales would grow 8.4% in 2021 from 2020′s total of $433 billion. That’s up from 5.1% growth between 2019 and 2020 – a notable jump, given how large the absolute numbers are.”

Source: CNBC 

One more proof that chips are likely to remain in short supply in the next months since demand remains higher than ever.

Diving more into chip shortage

In USA, President Joe Biden signed an executive order aimed at addressing a global semiconductor chip shortage, that has forced manufacturers to cut production.

The US President also ordered economic and national security experts to make a research in possible gaps in the semiconductor supply chain in USA to understand how dependent they become to other countries to manufacture semiconductors.

However, specialists affirm that in short-term, the ship shortage will persist well during 2021.

From a chip’s manufacturer perspective, ON Semiconductor confirms that the company is experiencing a rush in orders for its products that they can’t keep up with, for now.

Although all this situation, ON Semiconductor has an optimistic view and expects to relieve from this situation by the second half of the year.

Regarding Europe, it represents less than 10% of global production of chips. Therefore, the European Union has plans of becoming less dependent on technologies manufactured by external countries.

“It is our proposed level of ambition that by 2030 the production of cutting-edge and sustainable semiconductors in Europe including processors is at least 20% of world production in value,”

Source: CNBC

This is an important step to Europe since manufacturers all over the world are facing delays in production and an increase of prices on its products.

There is a lot happening globally but now I ask… how are telcos being affected by this crisis?

What does the chip shortage mean for telcos?

As said before, telcos where not left of this crisis – “The National Broadband Network (NBN) has confirmed reports in Commsday that it will pause connecting new customers on its HFC cable network.” Source: ZDNet

The lack of chips is also affecting The National Broadband Network that stopped connecting any new HFC premises with the intention of only allowing orders to be placed that will be reconnecting to the NBN HFC network.

This is a problem to customers that are connected to NBN network for the first time or that don’t have any order, since their orders were not placed.

Overcoming the semiconductors shortage in the telco industry

With the chip shortage with no end in sight, solutions are urgent to overcome this crisis.

It’s known that this shortage is mainly affecting Active Equipment which is also causing a scarcity and increase of the prices of products from this category.

Since delays on delivery times and the huge increase of prices were not on plans of telco companies, it’s time to search for alternatives and guess what, we already did that job for you!

Below you can see some of the best practices that telco companies are using to adapt their businesses to this situation:

  • Telco Operators changed their planning cycles, extending their firm orders from 3 months up to 12 months, in hope to secure the CPE needs.
  • Telco Operators are investing in their Reverse Logistics, extending the Life Cycle of their CPE and Network Active Equipments.
  • Telcos are looking for new sources to secure their needs of equipment, opting also for Refurbished Equipment.

But why Refurbished Equipment?

You are not only leaving your footprint in circular economy but also fighting the scarcity of products with a solution that will help you maintain networks working at very competitive prices.

Don’t know how to get Refurbished Equipment? Check this solution.

With the global chip crisis at its peak, the specialised marketplace in telecommunications has the capacity of providing equipment that is lacking in the market, with fast deliveries and competitive prices.

Twoosk is a provider option, offering a wide range of products from all technologies in one single place with a plus. Concerned with sustainability in the industry, the telco marketplace also has offers of refurbished equipment and HFC equipment is not an exception.

Don’t wait more and check HFC equipment at competitive prices here.

Teleste AC3000 Intelligent Amplifier on Twoosk

Now that you know everything about the chip shortage and found out the solutions to help you overcome it, share your opinion in the comments!

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