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Dear [FIRSTNAME],
Global supply chain issues have driven lead times of ICT products to
become longer and longer, up to 300 days.
Why are ICT products' lead times so long? How do we respond to the
delays?
Router-Switch.com
is actively coping - a 20-year ICT hardware supplier - provides some
viable options for you to mitigate the impact of long lead times.
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Long Lead Time becomes Norm for ICT products
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On April 12, according to the Taiwanese media "Economic Daily", the
lead time of semiconductor packaging continued to be extended.
Sondrel, an IC design service consulting company, pointed out that
due to the change in the order of production capacity in the
semiconductor supply chain, and the need for new packaging capacity
and personnel training, it will take time. Packaging lead times have
been extended to 50 weeks.
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The lead time for key semiconductor manufacturing equipment has been
extended to 18 months and beyond, threatening the capacity expansion
plans of device manufacturers, reports the Nikkei.
The report mentioned that most parts and materials are in short
supply, including lenses, valves and pumps, microcontrollers,
engineering plastics and electronic modules, etc.
At the same time, demand for chip machines is surging. The delays
come as the semiconductor industry embarks on a massive expansion
drive to remedy the chip shortage that has hit a wide range of
industries. Which has sparked a sense of crisis among chipmakers and
equipment suppliers alike. Even mighty Apple has been affected.
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Also, according to Cisco's suppliers, the delivery period for
ordering
Cisco products
is also getting longer and longer. For
example, it is said that the longest delivery period for the hottest
product series, the Cisco Catalyst 9200L
switches
can exceed 300
days, which is close to 40 weeks.
An announcement from Cisco said, "Material shortages across the
semiconductor industry as well as logistics challenges continue to
impact supply chains globally, slowing output across multiple
industries from automotive to consumer electronics and beyond. This
has resulted in extended lead times across almost all of our
products and extended delivery dates."
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According to Fortinet news, their Fortigate
firewalls
series lead times will extend. The following are approximate
availability ranges for Fortinet's various product groups:
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High-end (FG-xxxx): 15-60 days
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Mid-range (FG-xxx): 15-60 days
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Low-end (FG-xx): 15-90 days
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FortiAP: 15-180 days
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Why are Lead Times So Long?
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COVID-19 may be the reason causes the long lead times in many
customers' eyes. However, COVID-19 is only a fuse to some problems.
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Chip Shortage
Friends who often read
international news know that the global chip is in short supply,
and there are many application fields of chips, such as
mobile phones,
computers,
automobiles, electric vehicles and so on. The
so-called "chip shortage" does not refer to low-end chips. There
are many countries in the world that can manufacture low-end
chips by themselves, but the real shortage is high-end chips,
such as 14nm, 7nm, 5nm, etc. Even the famous Huawei Kirin chips,
have 5nm design capabilities, but cannot produce such chips.
Therefore, ICT products that are high-tech will be forced to
reduce the production speed due to the shortage of chips and the
ensuing shortage of materials, which will eventually lead to
prolonged delivery.
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In Short Supply
The epidemic has caused most people in the world to not go
out and work as usual, and can only stay at home to avoid the
virus, which has increased people's demand for information
equipment and carriers, resulting in a shortage of related
products.
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Few Skilled Workers
In the same way, because of the ravages of COVID-19, the
staff of most manufacturers is forced to stay at home most of
the time, unable to carry out efficient work. Coupled with the
aging problem in developed countries, the average age of skilled
workers is over 50 years old, and the older age leads to slower
production efficiency. Of course, most ICT product manufacturers
choose to set up their factories in underdeveloped countries,
but underdeveloped countries have poor medical resources, and
the impact of COVID-19 is more severe in these countries.
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Difficulty in Transportation
Not all countries are taking open measures to coexist with
the COVID-19 virus. Some countries will take strict entry and
exit measures, resulting in very slow transportation of
products. For example, the severe epidemic in some countries
will limit the frequency of air transportation, resulting in
many goods needing to be transported by sea, and sea
transportation, as we all know, is very slow. This further
lengthens the lead times of the product.
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3 Suggestions to Shorten Long Lead Times
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Supply chain delays cause long lead times for ICT equipment. Here
are 3 suggestions that can help you mitigate the impact of delays:
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Plan ahead for the new project, at least one
year
If you are an integrator or end-user, you need to build a
new network system, or you are going to bid on a project, please
communicate the requirements with your suppliers as early as
possible.
For example, if you plan to build a
data center
next year, please find suppliers to provide related products in
the first half of this year. Don't wait until the project is
about to start before you ask for a purchase. After all, none of
the four reasons for the long lead times can go away in a few
years.
If you have planned your projects in advance, at
least one year, the lead times will seem to be shorter than you
think.
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Buy small quantities and multiple times, from multiple
suppliers
Depending on your project needs, a "patchwork" approach is
recommended.
For example, to build a data center, if you
want to get products right now, you can buy
servers
from supplier A, network products from supplier B, and cables
from
supplier C.
Moreover, you can purchase devices in several
batches, just keep sharing inventory information with your
suppliers.
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Buy common and basic equipment
It recommends purchasing common, basic equipment. In order
to provide a good customer experience and their own income,
manufacturers will not sit idly by the problem of excessively
long delivery. They will devote resources to improving the
efficiency of the production infrastructure to try to meet
general demand.
Therefore, for more partial products, you
can
suspend the demand now, and go to buy common basic equipment
first!
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Stay ahead of it. If you have a project coming up and are worried
about lead times or need another option, we're here to help.
Reply to the email or talk to your sale manager to find out more.
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18000+ Buyers Trusted
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200+ Countries /Regions Global Delivery
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$20 Million Inventory Available
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50%-98% Off Global List Price
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20 Years in Business
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Free Technical Support
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| Email:
sales@router-switch.com
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HongKong Yejian Technologies
Co., Ltd.
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| US Tel: +1-626-655-0998 |
Branch: HK | USA | UK
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| HK Tel: +852-3069-1868 |
www.router-switch.com |
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