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Production constraint driven by chip shortages may continue into 2025

GLOBAL SUPPLY CHAIN WORSENS OUTLOOK FOR VAST MAJORITY OF IT EQUIPMENT SUPPLIERS.

According to a new industry survey the stranglehold on the supply of key product components such as semiconductors is now affecting 97% of vendors, with 63% flagging this as severe.

That’s up from 40% of vendors in April 2021. Some 86% of companies will experience moderate or severe problems over the course of this year.

Lead times have been most affected by the disruption, with companies reporting on average a 74.1% increase compared to previous years. Prices have soared by 30-50% in the last year and inflation in the IT sector is now running at a staggering 44%.

Some of this cost is being absorbed but margins are being cut and average prices of final product are now up by over 25% this year so far.

Compounded to these issues is the issue of larger companies who have the economies of scale during rougher times have started stockpiling heavily on IT Equipment and are placed at the front of the queue by nervous vendors in an attempt to satisfy their core client base, It’s similar to the early days of the pandemic when people overstocked on toilet paper at home.

Suppliers and developers of product tagged IP, cloud or software-defined are far from immune either. All of these systems rely on hardware. Data centres comprise racks and racks of servers. In fact, 96% of businesses rely on hardware and Cloud is not a strategy that will help the industry out of this crises. Cloud service providers will be severely affected by shortages, price rises not just on the equipment but also with the spiralling cost of energy in the marketplace.

ServerSource can offer you a reliable partnership for the road ahead, if you have any projects that are currently delayed or are in the planning stages then we can offer a dialogue to hopefully help overcome the shortages, delays and price rises that are at the door.

ServerSource currently has available products and politely ask that you make any colleagues in the wider industry aware of our services as an assist to overcoming what has now become a realised version of the predictions pre-warned some time ago.

We very much look forward to hearing from you and to assisting you with your requirements.

 

ServerSource Team