We were already aware of the Global chip shortage and the implications it brought along. Similarly, a potential worldwide shortage of optical cables might cause problems for companies. The shortages have driven up the prices and lengthened lead times hindering telecommunications infrastructure.
The demand for internet-based services is rising and so is the requirement for optical cables. However, market analysis shows the prices have risen over 70% in the last month or so. And countries are constantly pressing ahead with their respective 5G rollouts.
Global optical cable shortage is upon us
Due to a severe scarcity of fiber optic cables, communications infrastructure projects will suffer bottlenecks. According to Cru Group, a market intelligence company, Europe, India, and China are among the regions most impacted by the shortage, with costs for fiber rising by up to 70% from historic lows in March 2021, from $3.70 to $6.30 per fiber km.
Although the technology itself receives little attention, fiber optic cabling is a crucial part of almost every significant infrastructure project. It includes everything from 5G and high-speed broadband to the underwater cables that support the services of the biggest tech companies in the world.
There are now concerns about whether countries will be able to reach targets established for infrastructure build. Given that the cost of deployment has unexpectedly risen, and whether this will have an effect on worldwide connectivity.
As per Financial Times, to accommodate the surging demand, businesses like Amazon, Google, Microsoft, and Meta are growing their data center empires, including by constructing enormous global fiber networks beneath the water.
Governments have set big goals for the development of 5G and ultrafast internet. However, both of them call for laying a significant amount of fiber optic cable underground.
Has cable consumption increased?
According to estimates from Cru, total cable consumption climbed by 8.1% in the first half of the year compared to the same period in 2016. China accounted for 46% of the total, with North America having the fastest annual growth rate at 15%.
The shortfall has resulted in not just erratic pricing changes but also significantly longer lead times. Small businesses with less influence are apparently having to wait up to a year for orders to be completed. It’s happening despite the fact that major enterprises with strong connections to manufacturers are expected to have it easier.
The one bright spot is that, according to industry experts, the shortfall is just temporary. You can consider this as more of a squeeze than a long-term problem, which should limit the severity of the setbacks experienced. Comment your thoughts down below.
