The shortage of ICT products and spare parts in 2022
By November 2022 we are still feeling the diminishing effects of a pandemic but many consequences are still very palpable in global, regional, and local economies. The ICT sector is still feeling and managing the by-product of these times. On the first order the disruption of the supply and manufacturing chain, on the second order a wave of canceled orders due to a lack of materials to produce parts and equipment has put stress on all players involved in the production, distribution, and sale of ICT equipment.
The factories of the components for the manufacture of ICT equipment are mainly located in Asia, specifically in China and Taiwan. The pandemic has resulted in temporary closures due to outbreaks, as well as a complete stop of segments of the production chain due to governmental prevention or prohibition. These cuts in OEM’s activity have led assembly plants to cancel certain orders to prioritize some products over others. In a landscape with reduced supply companies like Intel choose to meet the demand for their higher-end products, having a better return for them:
"Intel, for example, until it rolled out its new 10 nm system, prioritized server and high-end desktop processors over low-end processors with its 14 nm capability" (1).
And precisely this prioritization causes the supply of parts and equipment to be reduced to the products that have the highest economic value for OEMs. These supply chain and production problems are forecast to persist through 2023. Prices will rise and lead times will increase significantly: