The ongoing shortage of core networking chips is likely to be greatly reduced around the end of the second quarter, according to Gordon Yang, CEO for network equipment supplier Unizyx Holdings.
Despite impacts caused by component shortages, Unizyx still posted consolidated revenues of NT$25.68 billion (US$896.82 million) for 2021, increasing 15.42% on year. It also recorded a 30% profit growth. Unizyx said it was unable to achieve an even higher profit growth due to chipmakers raising the price of their products in the fourth quarter last year.
Acknowledging that shortages of some components will persist throughout 2022, Yang expects the shortage of core networking chips to be less severe starting from the third quarter. As a result, Unizyx will place a stronger focus on the management of its inventory, he said, adding that the company's inventory level stood at NT$6.21 billion at the end of 2021.
Industry sources previously suggested that some IC designers are shifting to 16nm process amid tight 28nm process capacity. Yang said this could help ease shortages of some components.
Arcadyan Technology and Gemtek Technology also predicted that the shortage of networking chips could ease in the second half of 2022. While the supply from Taiwan-based chipmakers is gradually improving, that from US vendors is expected to remain tight, Arcadyan president Edward Tseng pointed out.
Meanwhile, Sercomm president James Wang said the company's inventory level stood at NT$14.21 billion at the end of 2021. He said this was mainly caused by shortages of components such as core networking chips and power management ICs (PMICs). He said the component shortages have seriously affected the shipment of Sercomm's products.
According to industry sources, even if the supply of core networking chips returns to normal, the shortage of peripheral chips will still be a challenge to networking device makers. However, as the number of components in short supply decreases, the companies now have an opportunity to lower inventory costs, the sources said.
Unizyx revenues, 2017-2021
Compiled by DIGITIMES, March 2022
Sercomm revenues, 2017-2021
Compiled by DIGITIMES, March 2022
