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Shortages pressure community distributors into artistic product redesigns

vijesh · September 26, 2022 · Leave a Comment


Provide chain issues have triggered most main networking gamers resembling Cisco, Juniper, Arista, and others to revamp or re-engineer some merchandise in an try to beat element shortages and ship merchandise to clients.

Lead occasions for some routers, switches and different gear is already delayed effectively past six months. Retooling to get {hardware} out the door can add is personal delay and put further strain on engineers trying to reshape issues like energy provides and board-level options with out inflicting main issues themselves.

And from all accounts, it’s the multitude of smaller, considerably older elements of switches and routers which are inflicting probably the most issues.

Talking at a Goldman Sachs convention this month, Arista CEO Jayshree Ullal mentioned that if there’s a commonality amongst semiconductor shortages it’s older 100-nanometer and bigger chips which are utilized in issues like analog and solid-state gadgets or energy converters.

“Technically, the fab capability and the provision of that must be simpler, however proper now, there’s a scarcity even there,” Ullal acknowledged.  “And there are additionally quite simple logic elements—like energy controllers, ICs [integrated circuits], AD/DA [analog to digital and vice versa] converters, logic gadgets—that aren’t mainstream connectivity, however then you definitely nonetheless want them to run to construct your whole system. So, it’s right down to 10 to 20 elements which are quite simple, which are inflicting us the best scarcity.”

The ‘golden screw’

Certainly it’s that difficulty inflicting probably the most issues throughout the {industry}.

“If any of the elements is lacking, the product can’t ship. Corporations can have 99 out of 100 elements to complete a product, however the one scarcity can cease manufacturing and maintain the product from being shipped. That’s the golden-screw phenomenon [one ideally perfect, small bolt that could finish a product] that producers are speaking about,” mentioned Sameh Boujelbene, senior director at Dell’Oro Group.

“This varies by vendor and by merchandise as they need to make a judgment name on which elements could be probably the most constraining issue (i.e with the longest lead occasions). What we heard about not too long ago are analog built-in circuits for energy provides however there actually may very well be others,” Boujelbene mentioned. “The constant suggestions we’ve been getting over the latest quarters is that it’s at the moment impacting extra downstream commodity elements.”

“Every half for every machine has a separate story, and we’ve seen some suppliers which are making an attempt to extend capability, however don’t have entry to tools or they’re ready for orders which are additionally constrained by semiconductors. So  the challenges are throughout the board and really particular to every machine,” Ullal mentioned in a monetary name earlier this yr.

This consists of forcing enterprises to make their very own variations to navigate the shortages, and in some instances inflicting distributors to make a adjustments to networking gear.

One Cisco government mentioned not too long ago: “What we began doing someday late final yr and definitely the primary six months of  this yr is basically taking a look at redesigning elements which had been choked, making an attempt to take away these redesigns, and people redesigns take time.”

On the time Cisco mentioned certainly one of its switches and one wi-fi system had seen some redesign and provide was now getting higher, but it surely declined to be extra particular about which merchandise these had been. The truth is not one of the distributors contacted for this story needed to speak about particular redesigns or different adjustments they might be making on account of provide chain issues.

What’s a redesign?

Redesigns sometimes deal with printed circuitboards the place the seller would possibly now want to make use of a element it usually wouldn’t as a result of say, its regular provider and backup suppliers don’t have the half, specialists say. So engineers want to determine the best way to make the connectivity pins and different items of these elements work on the board, design that into an current product after which guarantee they will repeat that in a method to assist meet demand.  

Conceptually, if it’s a rational engineering group, it might have a look at what the most important affect is from the fewest variety of adjustments, mentioned one {industry} observer. Distributors will not be going to vary each product, however they are going to have a look at merchandise which have probably the most affect. 

“The first focus has been round consolidating {hardware} designs wherever potential, in order that there’s extra element similarity, if not uniformity, between discrete machine classes and lessons. Typically that’s not potential, in fact, but it surely must be pursued as a common rule to simplify supply-chain procurement and to convey larger consistency to supply schedules,” mentioned Brad Casemore, analysis vice chairman, Datacenter and Multicloud Networks at IDC. “Equally, if Cisco or one other vendor finds {that a} particular provider or half has been problematic, they’ll search design or provide alternate options.” 

For purchasers it must be reassuring to listen to that their suppliers are re-designing merchandise to accommodate completely different elements and diversify their provide chains. Boujelbene mentioned. “Some distributors had been additionally keen to pay larger dealer and expediting charges to make sure on-time product deliveries to their clients.”

For higher or worse, nearly all main vendor have used brokers, and paid the next worth to obtain hard-to-get components. However the concept is identical: Distributors can both construct a product or get components from brokers with some slight adjustments that clients in all probability don’t care about. Or they will anticipate the availability chain to settle and take supply when issues are extra obtainable, specialists mentioned.

Fewer ASICs?

One of many potential outcomes of the availability scarcity and system redesign could also be discount in use of {custom} chips and ASICs present in some Cisco, Juniper, Excessive, and different tools, specialists mentioned.

“Each vendor has a number of chips right here and there that they’re making an attempt to supply or get an alternate for and, I’d speculate that what they is perhaps taking a look at doing was altering out among the {custom} chips they’d developed and nearly actually can’t produce in home for extra normal {industry} chips,” mentioned Tom Nolle, president of CIMI Corp. “The entire custom-chip factor was, for distributors, a little bit of a PR play.  Industrial silicon from firms like Broadcom could be a greater and cheaper possibility, long-term, and for the shoppers it might probably find yourself higher, too.”

One other outcome, has been an uptick in gross sales of software program and digital kind elements for community capabilities, resembling utility supply controllers, IDC’s Casemore mentioned.   ADCs are community home equipment that may bolster efficiency and safety of cloud purposes.  

“Our assumption is that that is partly as a result of larger availability of industry-standard {hardware} versus fixed-function {hardware} home equipment,” Casemore mentioned.  “Equally, multivendor automation and orchestration programs, in addition to open-source networking software program (resembling SONiC—the open-source community working system), has skilled a gross sales increase.”

“In some instances, we’ve famous that clients had been drawn to the larger flexibility and selection that such software program facilitates within the face of supply-chain issues,” Casemore mentioned. 

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Copyright © 2022 IDG Communications, Inc.

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