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The shortage of materials and labors in fiber optic industry

Views:4     Author:Judy Chang     Publish Time: 2021-08-19      Origin:Site

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The European and American markets are about to usher in the peak of optical broadband construction, but the shortage of optical fibers, chips, other materials and skilled labor may affect the expansion and deployment of new broadband networks.


ICC News, just as the US market is about to usher in another wave of expansion peaks, the fiber optic broadband industry is discussing material and labor shortages. With billions of dollars in federal broadband subsidies in place, Internet service providers are preparing to expand existing networks or build new networks in underserved communities.


However, it is impossible to build a network without materials and hardware, especially in the United States and Europe. COVID-19 undoubtedly complicates the situation. The pandemic shut down electronics manufacturing plants in Asia for several months, which prevented the flow of goods. However, some industry analysts said that pressure on optical fiber broadband-related materials and components has begun to appear.


Ronan Kelly, chief technology officer of ADTRAN and former chairman of the FTTH European Commission, said that the continuing upsurge of fiber-optic broadband in the UK has now spread to all of Europe, making the materials needed to build the network very short before the pandemic. Four years ago, about 10 operators were building fiber optic networks. But today, 50 operators are building fiber-optic networks, and the incumbent operator Openreach's goal is to reach 20 million households in the next five years.


Kelly said: "As investors want to establish networks as soon as possible, hundreds of billions of dollars have been injected into the European market, and the same thing has begun to happen in the United States. The demand for electronic products from raw materials to optical fibers is exploding."


Broadbandtrends chief analyst Teresa Mastrangelo believes that chip supply issues may delay the network expansion plans of US service providers. She said: "The biggest problem we continue to see in the United States is the shortage of components, which obviously affects equipment. Operators may face challenges in the supply of required network equipment to expand or upgrade their broadband networks."


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Chip supply shortage


The pandemic further verified the necessity of high-speed broadband to support the basic lifestyle needs of the 21st century. This also makes more people pay attention to the global supply chain. One component affected is the semiconductor chip.


To solve this problem, President Biden signed an executive order to review the state of the US supply chain. He also proposed to provide 50 billion US dollars of stimulus incentives for the US semiconductor industry. However, Kelly said that the chips used in fiber-optic broadband equipment are of an older generation design. These chips are also used in the automotive industry, consumer electronics and some industrial equipment, so there is competition for supply. Kelly worries that if US manufacturers increase production, they may focus mainly on making new generation chips.


"The current challenge is that there is not much investment to increase production capacity for the older generation of products in the industry," Kelly said. "Investment funds are mainly concentrated on the development and manufacturing of seven-nanometer, five-nanometer and three-nanometer technology chips to obtain greater returns."


Semiconductor chips are just one of the components that are in short supply. Electronic capacitors, resistors and even plastic polymers are becoming increasingly scarce.


"You may already have the most complex circuit board in the world, but if you lack a filter cap, you can't get the product into sales," Kelly said.


To ensure that materials and hardware can meet long-term fiber optic construction needs, suppliers and manufacturers maintain close communication with their supply chain partners and customers. The shortage of materials has sparked discussions about bringing more manufacturing back to the United States.


Tom Tunstall, senior research director at the Institute for Economic Development at the University of Texas at San Antonio, said: "I think there is a feeling that the United States might unwisely outsource large amounts of production capacity. Going out has given up our dominant position in the manufacturing industry."


He said: "I haven't really understood any discussion about the method of national sovereignty, but given the current continuous trade restrictions on China, undercurrents are certain. Business schools and institutions should reconsider their future supply chain strategies-reliable trade. The partner is equal or more important than the cheapest trading partner."


For now, a 60-week delivery period for materials and supplies is not uncommon. Kelly said that larger companies with stronger capital can hoard inventory to ensure that their customers continue to grow. He said that ADTRAN has been in communication with customers to understand their construction plans for this year. He predicted that the ISP (Internet Content Provider) that is currently implementing a network construction plan may face the biggest obstacle is how to ensure inventory.


Therefore, Mastrangelo predicts that some companies will have to scale back their expansion plans for 2021. "I don't think anyone will refuse an order, but the time from the company placing an order to receiving the goods may be longer than expected," she said. "They can only use existing resources to make adjustments. Therefore, if their equipment can only meet the needs of thousands of users per month, they will do their best."


Labor training is the key


Compared with the time required for the optical fiber industry to resolve the shortage of skilled labor, it may be a better situation to wait for a year of materials and hardware. In the UK, the government apprenticeship trains workers in all aspects of the optical fiber trade. These training programs usually take up to 12 months. Some companies are currently abolishing this approach and offering specific training for positions that need to be filled quickly.


In the United States, the Telecommunications Industry Registered Apprenticeship Program, a joint venture between telecommunications companies and industry associations, reports that there will be more than 3,600 registered apprentices in the telecommunications industry in 2020. Other industries have successfully partnered with local colleges, universities, or trade schools to cultivate a skilled workforce to fill vacant positions.


Until more people choose to pursue a career in telecommunications, fierce competition for experienced employees may continue. Although this helps maximize workers’ salaries, there may be some trade-offs for employers.


On Trac Inc. provides various on-site and professional services, and is a Google Fiber installer. The company is always looking for top talent. The company’s president, Monte Hill, said that many large companies lack the same skilled labor force. Their company has also recruited many such telecom veterans, but after investing time and resources, they left after a short salary increase. As a result, On Trac has shifted its focus to recruiting talent from outside the industry, which means that it will take about 6 months for new employees to fully keep up.


The optical fiber industry is struggling to make up for its skilled labor and supply shortages. Is this creating an opportunity for 5G and other broadband technology companies to quickly fill the gap? Industry experts believe that this service can provide solutions for some victims of the digital divide. But the seemingly insatiable demand for broadband capacity by technology developers and consumers seems to give fiber optic technology an advantage over any fixed wireless alternative.


Mastrangelo said: "I think we have identified a trend that remote work and education will be more common than in the past. The problem is that the people who really need remote broadband connections are those who don't have broadband. The construction of fiber optic networks will take time. I think we need to consider all the available means, whether it is fiber optic, satellite broadband, fixed wireless access or 5G. We urgently need to find all alternatives to provide some type of broadband service to people who are currently unserviced as soon as possible."


Kelly said that as service providers provide more available bandwidth, various applications will follow. "Consumers will continue to use more bandwidth. In order to meet this continuing demand, we must continue to expand the network," he said. "In my opinion, compared with 5G, fiber optic technology is more suitable to meet these needs."


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