Telecom Sector Impacted by the Global Chip Shortage

Telecom Sector Impacted by the Global Chip Shortage

SBC monitoring for any in-building supply chain impact
Posted on April 29, 2021

The ongoing global chip shortage has made headlines by impacting the automotive and consumer electronics sectors for months. But wireless OEM’s may soon feel the pinch.  

In a quick poll of SBC members who would know, it looks like OEM’s are already taking steps to mitigate chip supply issues, although no one would say at this moment that they are projecting shipping delays for product. 

One topic of discussion centered around whether AHJs would be understanding of supply chain delays for telecom equipment and might consider some level of forbearance for building owners making an honest effort to be compliant with code requirements. 

“The ultimate goal is to achieve compliance”, said Chief Alan Perdue, Executive Director of the SBC, and a former AHJ. “Often times there are circumstances beyond our control that could impact project timelines. As long as building owners and their vendors are making good faith best efforts to meet the compliance requirements, AHJs can be flexible in granting additional time to resolve problems like supply chain interruptions, as long there is proper documentation, such as a completed purchase order and a back-order notification.” 

Of course, steps should be taken to minimize any public safety risk, and the length of any anticipated delay could affect the AHJ’s determination. 

The cause of the shortage is a perfect storm of factors. The following is from a recent Reuters article on the topic: 

The shortage stems from a confluence of factors as carmakers, which shut plants during the COVID-19 pandemic last year, compete against the sprawling consumer electronics industry for chip supplies. 

Consumers have stocked up on laptops, gaming consoles and other electronic products during the pandemic, leading to tighter inventory. They also bought more cars than industry officials expected last spring, further straining supplies. 

Sanctions against Chinese tech companies have further exacerbated the crisis. Originally concentrated in the auto industry, the shortage has now spread to a range of other consumer electronics, including smartphones, refrigerators and microwaves. 

With every company that uses chips in production panic buying to shore up stocks, the shortage has squeezed capacity and driven up costs of even the cheapest components of nearly all microchips, increasing prices of final products. 

[Data firm IHS Markit] said a fire at a Japanese chip-making factory owned by Renesas Electronics Corp, which accounts for 30% of the global market for microcontroller units used in cars, has worsened the situation. 

Severe winter weather in Texas has also forced Samsung Electronics Co Ltd, NXP Semiconductors and Infineon to shut down factories temporarily. Infineon and NXP are major automotive chip suppliers, and analysts expect the disruptions to add to the shortfalls in the ailing sector. 

SBC will be monitoring the situation for impacts. If your company is being impacted by the chip shortage, resulting in problems with a jurisdiction, reach out to us and we’ll try to assist.

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