Delays in the supply chain of hardware products in South Africa are still evident and will last until at least 2023, according to the technology industry research and advisory firm BMIT.
The company told MyBroadband that there are still significant shipping backlogs due to high post-Covid demand, and the recent outbreak in China further exacerbated the delays.
In South Africa, delays in shipments coming through Durban harbour due to the recent floods have further contributed to supply chain challenges in the country.
“Operators in SA have reported shortages of various items to BMIT as recently as last week — one example being particular brands of Wi-Fi Access Points,” BMIT told MyBroadband.
“There are still serious global shipping backlogs, exacerbated by unexpectedly high post-Covid demand. The recent outbreak of Covid-19 in China has had further impact.”
“Locally, the floods in KwaZulu Natal resulted in significant delays in goods coming through eThekwinini Harbour,” BMIT added.
BMIT said it doesn’t expect the supply chain challenges to normalise until 2023 at the earliest.
It added that a concerning side-effect of supply shortages is price inflation, as companies in the ICT industry are used to hardware prices dropping.
“For example, with IoT, if the price of sensors increases, that will slow down adoption,” BMIT explained.
According to the firm, manufacturers are investing heavily to increase their existing capacity, adding that many have also taken steps to hold more stock and expand their supply chains.
“There is significant investment in new chip foundries and expansion of existing capacity, but it takes time for the investments to result in production,” it said.
“The spate of supply line disruptions since the first incidents at Wuhan in China, in January 2020 has compelled many companies to diversify their supply chains and increase stock holdings, so that they are less exposed to individual incidents.”
However, BMIT added that it will still be a while for these investments to increase production.
The supply constraints started when the Covid-19 pandemic and lockdowns resulted in decreased chip production from major semiconductor manufacturers.
In November 2021, Qualcomm revealed its expectation that the semiconductor shortage and subsequent supply constraints would only last until 2023.
This is similar to BMIT’s expectations. However, it noted that this was the best-case scenario.
Concerns were also recently raised regarding the Russia-Ukraine conflict’s impact on chip and hardware shortages.
However, manufacturers have said that the crisis in Ukraine is unlikely to make shortages worse.
MyBroadband asked Axiz, Tarsus, Pinnacle, and Mustek for comment but they did not respond by the time of publication.