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Wireless Networks


News

Rakuten says chips crunch ‘much worse’ than expected

Rakuten says chips crunch ‘much worse’ than expected

  • Written by Iain Morris / Light Reading
  • 16th June 2021

Consumers have grown used to long store queues in the age of social distancing. The same goes for the organizations that buy semiconductors. This used to be a relatively quick and easy affair. But amid an unceasing pandemic, surging demand for electronics and a trading spat between superpowers, businesses today face a long wait for their chips. And it is threatening a full-blown economic crisis.

Unlike the automotive sector, the telecom industry has looked relatively unscathed so far. But it seems increasingly vulnerable. In April, Nokia CEO Pekka Lundmark aired some concern about the crunch. “I believe we will continue to do a great job, but it would be naïve to say there are no risks because visibility is not what it was,” he told reporters on a call about results. The latest warning from Tareq Amin, the chief technology officer of Japan’s Rakuten Mobile, indicates long-term disruption is now unavoidable.

“The situation is actually, honestly speaking, much worse than I had anticipated,” Amin told reporters and analysts earlier today. “The mid- to long-term outlook I don’t think in this industry is looking necessarily great. Everyone I talk to tells me this will be an uphill battle for the next 24 months.”

Amin seems to have based his assessment on conversations with company bosses at Broadcom, Qualcomm, Intel, Nvidia and NXP, several of the main semiconductor firms that serve the telecom industry. And he is sanguine about his own immediate situation. “Luckily, I have purchased and forecast and placed orders well ahead of time before shortages have happened, whether it is servers or products and components for remote radio heads or even products we need for terminals we are building under Rakuten,” he said.

But he has already seen evidence of growing delays. TSMC, the Taiwanese foundry with a near monopoly on the manufacture of high-end chips, has already told him not to expect any parts to arrive for two months. “My worry is not about cost but about my ability to procure and supply the hardware products that are needed to continue to meet the build plan numbers that we want to finish.”

Crunch to hurt big vendors, too

Known historically as a smaller, Japanese version of Amazon, Rakuten is busy constructing a fourth mobile network in Japan that takes advantage of the latest cloud and software technologies. Amin has relied more heavily than traditional service providers on general-purpose processors and server equipment normally intended for the IT sector.

His background on the vendor side – he previously worked for China’s Huawei, among other firms – and interest in shaking up the supply chain have made him more intimately familiar with the components market than many telecom technology executives. “He is close to semiconductor companies and has been working with them directly for the Rakuten Mobile deployment,” says Gabriel Brown, a principal analyst with Heavy Reading, a sister company to Light Reading.

To read the complete article, visit Light Reading.

 

Tags: Companies Critical Infrastructure Enterprise Federal Government/Military Funding Interoperability News Public Safety State & Local Government Subscriber Devices System Installation System Operation Tower & Site Tracking, Monitoring & Control Wireless Networks News

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