The components shortage is hitting the telecommunications industry with complaints about lack of supply of key components affecting the financial performance of Tier One OEMs.
Earlier this month, Nissan complained that shortage of semiconductors had brought six car plants to a halt. Now the telecommunications industry is complaining.
"It’s an industry-wide, global problem that won't be resolved over the next three months," says Alcatel-Lucent CEO Ben Verwaayen.
Ericsson says that scarcity of components was affecting its turnover. "We estimate that this (the shortages) had a negative impact on our sales in the quarter by 3-4 billion crowns” ($400-$500m.) says Ericsson.
Nokia-Siemens Networks has also complained about a shortage of components affecting its business.
The CEO of NetApp, Tom Georgens, told a Reuters conference: “We've seen a pretty significant response on low-capital industries to bring capacity back on line, but high-capital industries have been somewhat more reluctant, particularly semiconductors."
Components manufacturers are acknowledging they have problems in supplying customers.
Hynix CFO Kim Min-chul told a Reuters conference "We are still unable to meet demand for PC and server DRAM chips."
While Bloomberg quotes STMicroelectronics’ CEO, Carl Bozotti, characterising demand for chips as “very, very strong and we and our competitors are not always able to serve all of the demand.”
In ST’s conference call for its Q2 results. vice president Carmelo Papa, said that component lead times were “not shortening.”
With shortages of semiconductors appearing so early in the semiconductor up-cycle that Tier One customers are affected – usually the last customers to be denied product by semiconductor suppliers - there is a growing feeling that semiconductor companies cut back too far on capacity during the downturn, and started re-investing too late.