Shortage of fiber optic cables could spell disaster for technology firms
An acute shortage of fiber optic cabling is set to create significant bottlenecks across critical communications infrastructure projects worldwide.
Analysis from market intelligence firm Cru Group shows the price of fiber has risen 70% over the last 18 months or so, as demand for internet-based services rises and countries press ahead with their respective 5G rollouts.
“Given that the cost of deployment has suddenly doubled, there are now questions around whether countries are going to be able to meet targets set for infrastructure build, and whether this could have an impact on global connectivity,” explained Cru.
A perfect storm
Although the technology itself attracts little fan-fare, fiber optic cabling is a foundational component in practically all major infrastructure projects, from high-speed broadband to 5G and the submarine cables that underpin the services of the world’s largest technology companies.
The current issues will also impact the development of new data center facilities, hindering expansion plans among VPN, cloud storage, web hosting companies and the like.
The ongoing shortage can be attributed to a number of different factors, from a steep rise in demand (consumption is up 8.1% year-on-year) to shortages of key ingredients in the manufacturing process, such as helium gas and silicon tetrachloride.
The CEO of Corning, the world’s largest producer of fiber optic cable, told the Financial Times he has “never seen anything like this inflationary crunch” and that his firm is working desperately to increase manufacturing capacity.
In addition to unpredictable fluctuations in price, the shortage has also led to a significant increase in lead times. Although large companies with strong relationships with manufacturers are likely to have a better time of it, small companies with less clout are reportedly having to wait up to a year for orders to be fulfilled.
The only silver lining is that industry insiders appear to believe the shortage is temporary – more of a crunch than a long-term issue – which should limit the extent of the setbacks suffered.
Via FT (opens in new tab)
