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Global Chip Shortage Continuing to Impact UK Broadband ISPs

Saturday, August 7th, 2021 (12:01 am) - Score 3,048
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Back in the early spring, we reported on how the global shortage of semiconductor chips was causing huge delays in the market for broadband ISP network kit (e.g. routers), which could make it harder for providers to add new customers, replace faulty kit or launch new products. Bad news, it’s still a big problem.

The original situation – flowing from a general rise in demand – was exasperated by a series of major events, not least of which has been the huge disruption caused by the ongoing global COVID-19 pandemic, which slowed production (factory closures, staffing issues etc.). On top of that there was a major fire at a key semiconductor plant in Japan and then a large ship (‘Ever Given‘) blocked the Suez Canal in Egypt for 6 long days – just enough time to disrupt global shipping for many weeks or even months thereafter.

Suffice to say that a general, albeit manageable, shortage of chips promptly snowballed and has since significantly disrupted the supply of everything from electric vehicles (EVs) and graphics cards to broadband routers, smartphones, video game consoles and the list goes on (i.e. the companies that rely on such chips often had to halt or slow production of their devices).

On top of that, any serious problems in the supply chain can also result in higher prices, although this hasn’t impacted every sector, which is perhaps partly because a lot of companies still have a backlog of pre-existing orders that need to be fulfilled (some of those will have been agreed before all of this began).

Karsten Gewecke, Zyxel (Router Manufacturer), said in April 2021:

“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. When I talk to some of the chipset vendors, some of them tell me that they have something like overbooking of 300% of their capacity.”

A few months have now passed since the situation ballooned into a full-blown crisis, but sadly the problem is far from over. The trouble now is that not only are there significant ongoing delays, but some network providers that were previously able to continue by using existing or surplus stock are running low and starting to truly feel the problem.

Naturally, our focus is on the broadband and mobile sector, which tends to reflect a variety of different devices from consumer and core network routers to bundled TV set-top-boxes and so forth. Over the past couple of weeks’ we’ve spoken, privately (for obvious reasons most prefer to be off-the-record), to more than a dozen different ISPs, manufacturers and communications providers, all of which seem to be seeing the same problems.

We’re being warned of Nokia supply being constrained throughout 2022,” said one source to ISPreview.co.uk, while another added that they’d been “told 235* days for the [Juniper] ex4650s. Quite a lot of kit is 8-9 months+.” Consumer broadband kit is also impacted, with a different provider noting that they were “being severely restricted by our supplier in [the] Technicolor routers we use as customer CPE.”

The lead time to delivery does seem to vary a fair bit between different products from the same manufacturers, as well as between different manufacturers in general. All of this reflects the fact that the “shortages are affecting some chip suppliers more than others,” said a different ISP. In short, many of the lead time delays being seen seem to vary, but stretch up to around 5-9 months.

As one of our sources eloquently pointed out, “9 months starts to get quite crappy.” Indeed, delays that stretch over around 6 months can become a problem because by the time your hardware arrives then it may have already been superseded by the launch of a new generation or model revision of the same device / line (technological evolution doesn’t stop, not even for supply issues), which can devalue the original order.

Suffice to say that the problems are not yet over, although we are starting to see some improvement and most ISPs are now ordering what they need well in advance (i.e. with any luck most broadband consumers won’t notice the impact).

Back in May 2021 AVM’s UK Sales Manager, Matthew Tyler, told us (here) “the global chip crisis [was] keeping things tense, [but] we see this relaxing later in Q4 with increasing additional supply of the new Wi-Fi 6 products.” Others have also echoed their expectation of improvement, if not total resolution, by the end of 2021.

Finally, a spokesperson for DrayTek told ISPreview this week: “We are not immune to the effects of the global chip shortage. It continues to affect our supply of certain DSL routers and modems. Luckily, it hasn’t affected our supply of fibre routers or our ability to launch a new G.fast router series later this month.”

UPDATE:

Correction, the final paragraph should have been attributed to DrayTek, not Zyxel.

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By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
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20 Responses
  1. Phil says:

    It’s Just In Time nature of manufacturing these days, it can all very easily become Just Too Late!

  2. Buggerlugz says:

    I don’t believe for a second its just chip manufacturing. Its impacting everything electrical now, which is all increasing in price, kitchen equipment and even home gardening equipment is seeing increasing prices.

    Its like we’re being kidded that inflation isn’t happening, when in reality its completely out of control now.

    1. CarlT says:

      Inflation is certainly there, especially on food, though in the case of items like this the shortages are responsible for much of the inflation. Demand stays constant, supply drops, prices rise.

  3. ianh says:

    I change ISP every 12-18 months, they insist on providing a router…if they give me the details i use my own modem and it sits in the box unopened. Ends up in the bin at the end of my contract.

    Its this sort of pointless setup that causes obscene amounts of e-waste (not to mention all the moving parts making and shipping). Just standardise and provide a router to sit behind it if needed. Like the old days.

    1. Matt says:

      FTTP does this (kinda) in that once the ONT is in there’s no need to replace router when swapping provider. Some providers will also sell you service without a router (Like Aquiss)

    2. - says:

      Matt, not sure how that fixes the issue 99% of fttp deployed in the UK is ‘two box’ type i.e a Layer 2 ONT and a seperate copper ethernet ‘router’ i.e with wifi.

      The layer 2 ONT is generally owned by the lowest level wholesale provider (cityfibre, openreach, fibrus, etc) and the router by the retail ISP. No different to the current situation IMO. No technical reason to change between two retail vdsl2 services either.. but they do so each retail ISP gains conformity and simpler support/OSS.

    3. Buggerlugz says:

      You’d think they’d realise, doing these stupid offers where the price doubles after 18-24 months, it’s just costing them more for hardware when folks leave.

    4. Neil says:

      At the end of 2019 BT made an announcement about addressing this issue & it has been written into new contracts about they retain ownership of equipment. they want equipment returned for reuse / recycle or they’ll bill the customer for the price of the router if they fail to return it. I’m sure that will cascade through to their other group companies like Plusnet & EE broadband.

  4. Anthony Goodman says:

    I keep saying this every time this story is posted. Manufacturers needs to standardise the Router operating system like we have Android for phones and Windows for PCs. This means you can use any router and tech support will be made much easier when doing it.

    Why do they not do this. It is an obvious solution. It means any router can be supplied or used with any provider.

    1. JustMe says:

      The majority of routers are running some form of OpenWRT based OS. That said, like Linux for OS, there are different flavours. There’s no incentive for manufacturers to harmonise kit. Often the only real difference with the suppliers is their software. The chip selection is often the same as others.

      Some movement has forced openaccess platforms where you can provision etc without needing proprietary software, this was pushed hard by the big operators in the US. Even Nokia (gasp) now allow you access to provision their XGS-PON hardware with non Nokia software.

      But I dont see ‘harmonising’ of the software for CPE, its still far too wide.

    2. JustMe says:

      You can already use most routers with most providers as long as it does the basic stuff needed for Layer 3 termination, authentication etc.

    3. CarlT says:

      XGSPON has standardised provisioning and telemetry. GPON doesn’t.

      As long as routers obey the relevant standards for external-facing functions, and most do, the rest is not an issue.

  5. Routemaster says:

    I have a load of old routers gathering dust in a cupboard. Partly due to ISPs insisting that a new router will fix your broadband issues! Imagine if instead of mass producing routers they just spent the money on the network instead? I wonder what the cost of issuing unnecessary routers is? I have several BT routers, plusnet and a Vodafone sitting around doing nothing. None of which were actually needed.

    1. TrueFibre says:

      I agree Routermaster. I would to see all ISPs asking you if you have your own router and if so the ISP shouldn’t need to give us one that them money.

    2. TrueFibre says:

      I agree Routermaster. I would like to see all ISPs asking you if you have your own router and if so the ISP shouldn’t need to give us one that would save them money.

      Sorry the spelling mistakes I hit submit too quick

    3. Mike says:

      The problem is that 90% of customers are too stupid to do it themselves.

    4. Meerkat says:

      ISP routers are cheap as chips so cost isn’t a huge concern for them.

    5. Anthony Goodman says:

      “ISP routers are cheap as chips so cost isn’t a huge concern for them.”. But as the issue in this story, they are in very short supply with significant problems to replenish.

  6. tech3475 says:

    Annoyingly, BT require me to use their router now because they switched me over to BT Digital from the old POTS/PSTN line.Yes I need the landline, stop sniggering, it’s not my decision.

    Otherwise I prefer just using my own ‘superior’ equipment.

    Funnily enough when I was with Vodafone, I found their equipment didn’t even work but I was using my own equipment anyway.

  7. James says:

    If isp stoped locking Routers that would be huge saving for them use the same router just change the details I use my own modem Router the Isp Router I sell on Ebay or throw out after contract I have a cuboard full Routers BT TT sky plusnet virgin never get used such waste

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