Chip shortage means businesses need to take a long-term view on IT projects
Posted by Caroline Moore on 14/09 at 10:00 AM Large enterprises, SMEs, Wi-Fi, Cloud-hosted telephone systems, Data networks, On-premise telephone systems, IT services,
Chip shortage blog

Shortages are causing issues across multiple industries with a lack of cement, bricks, cars, bottled water, chicken, milkshakes and beer grabbing the headlines. In our industry, it is the semiconductor chips used in electronic devices that are causing the biggest headaches.

As people set up their offices at home or used tech to keep them amused during lockdowns, so the demand for hardware increased, just as chip factories were closing down. Billed as a perfect storm caused by Brexit and COVID-19, this situation has been compounded by other events and circumstances:

  • A BBC report revealed that a bad winter in Texas shut down semiconductor factories in February and a fire at a Japanese plant in March have also caused delays.
  • The cost of shipping by sea and air, and a lack of lorry drivers have also played its part.
  • The US also stopped the sale of chips to Huawei, which meant the Chinese firm sought other sources that would have affected the supply chain for others.
  • Some tech firms stockpiled chips at the start of the pandemic, which left others struggling to source them.

The industry is trying to respond by increasing chip production, building new factories, and training new workforces, but the CEOs of IBM and Intel still estimate that the shortage could last two years.

While people can do without their fix of Nando’s or KFC, IT projects may be trickier to shelve. When infrastructure or hardware needs replacing, it needs replacing! Existing solutions may limp along, but many will be vulnerable to security breaches or will be too slow to maintain a productive workflow.

The immediate result is that lead times for ordering hardware are the longest they have ever been and prices have begun to creep up.

We have been advising our customers to look ahead to projects they were going to consider in one or even two years’ time, so they can get their orders in now. This is not a shady sales pitch! The shortage is real and businesses need to be prepared to wait...or just proactively prepare by pulling the project legwork forward.

For example, if businesses are planning to upgrade their Wi-Fi network next year because it will be entering its end-of-life period (usually when the hardware is five to seven years-old), they need to start making a plan now.

Similarly, where businesses have a plan to replace their ageing phone system in time for Openreach’s 2025 PSTN and ISDN switch-off, we would advise them not to leave it until the last minute. You may want some time to consider what you want to upgrade to, but you will also need some time for your new hardware to be manufactured and delivered.

A long-term view is needed here to box clever in the face of the ongoing chip shortage. Please don’t be caught out and left using tech you knew you were planning to replace. If you want to bring any IT project plans forward, please do not hesitate to contact us.

Posted by
Caroline Moore's avatar
Caroline Moore on 14/09/2021

Former newspaper journalist, Caroline joined the company in 2008 with no previous knowledge of the industry.

She set about stripping back all the jargon to produce plain English marketing collateral to support the sales teams. Now slightly more well-versed in the dark arts of voice, connectivity and data services, Caroline writes blogs, case studies, data sheets and social media updates to engage with potential and existing customers.

This industry is far cry from her previous working life when she worked as communications manager for Exeter Chiefs and Northampton Saints.

Contact: caroline.moore@swcomms.co.uk

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