Shortages of chips and components for network equipment will reduce in Q2,2022

Equipment supplier sources said the consequences of overbooking customers’ networking equipment could begin to materialize in the second half of 2022 when chip and component shortages and logistical issues are expected to ease.

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Moreover, Edgar Masri, CEO of switch manufacturer, said that the third quarter will be a key node to observe changes in the network equipment industry. He expects tightness in the chip and component markets to improve in the third quarter, but it remains to be seen whether customers will cut orders after the improvement.

James Wang, chief executive of broadband network solutions provider Zhonglei Electronics, noted that the company is controlling the speed at which it accepts new orders to improve its inventory management. While actual demand from customers remains fairly strong, they tend to overbook by placing orders desperately when parts are running low, he said.

Furthermore, Zyxel CEO Gordon Yang said the shortage of parts has caused customers to place significantly more orders than before, and they may cancel orders or ask for delayed shipments once the tight parts supply situation eases in the second half of the year.

(via)