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The impact of Chip Shortage on Network upgrades

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4 minute read by Taylor Wilson
Solutions Consultant at Penta Consulting

The current global chip shortage is having a significant impact on the supply of network equipment, specifically for companies in the telecommunications sector. As networks continue to play an increasingly critical role in our modern and digitally-driven world, telecoms companies are under immense pressure to keep up with the demand for faster and more dependable connections.

We recognise that the current chip shortage has immediate consequences on the availability of critical components such as routers, switches, and other networking equipment. As a result, companies are unable to implement necessary infrastructure upgrades swiftly, which hampers their ability to introduce newer technologies and enhance their network capabilities.

Industry is focusing on supplying newer equipment, rather than maintaining the old, such as the introduction of 5G.


The chip shortage is not only affecting companies’ ability to upgrade their networks but also influencing the industry’s strategic focus. At Penta Consulting, we understand that with the introduction of new technologies like 5G, the burden on telecoms companies to deploy advanced infrastructure is immense. However, the shortage is diverting attention and resources toward the supply of newer equipment, leaving the maintenance and support of end of life equipment at risk.

As a result, companies are finding it increasingly challenging to maintain legacy systems while deploying advanced infrastructure. This shift in focus can have a significant impact on the overall productivity and competitiveness of the companies. The importance of finding a balance between deploying new infrastructure and maintaining legacy systems needs to be recognised.

The current chip shortage is causing a surge in the cost of networking equipment, making it more expensive for companies to afford the necessary upgrades. The difference between demand and supply inevitably leads to price increases, making it challenging for telecoms operators to balance the need for network improvements with budget constraints.

The broader impact of the chip shortage extends even further, with rising inflation costs affecting the overall operational expenses for telecoms companies. Support contracts, which involve maintenance, troubleshooting, and system upgrades, become increasingly expensive year on year. The combined effect of the chip shortage and rising costs puts additional strain on operators attempting to deliver high-quality services without compromising their bottom line.

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Maintaining legacy is more important than ever as operators can’t upgrade their network as quickly as they want

With the limited availability of networking equipment due to the chip shortage, maintaining the existing legacy infrastructure becomes a critical consideration for telecoms operators. Inability to upgrade their networks as swiftly as desired requires the focus on ensuring the stability, reliability, and performance of the existing systems. Companies must prioritise the support and maintenance of legacy systems to bridge the gap until they can implement the necessary upgrades.

We understand the challenges faced by telecoms operators during the chip shortage. While we cannot directly address the issue of procuring new chips, we offer vital support in the form of legacy software and hardware solutions. Our team of specialist engineers possesses extensive experience working with legacy vendor technology, allowing us to provide comprehensive support, including health checks and optimised performance of existing networking equipment.

Our legacy software and hardware solutions are designed to help companies maintain their existing infrastructure and ensure it runs smoothly, no matter what vendor technology your network includes. This approach enables companies to bridge the gap until they can procure new equipment and implement necessary upgrades.

Our specialist engineers have 10+ years of working on legacy vendor technology.

Our specialist engineers possess over ten years of experience and have the expertise to resolve any issues raised and to perform preventive health checks on your networking equipment. By evaluating the performance, identifying potential bottlenecks, and raising any issues early on, we ensure that your existing legacy infrastructure continues to run smoothly, providing you with the necessary stability and reliability to meet your operational requirements.

In conclusion, the chip shortage continues to significantly impact the supply of network equipment and support services in the telecommunications industry. Operators face challenges in upgrading their networks promptly and meeting the increasing demands, ensuring optimal performance for their customers. In addition, the scarcity of networking equipment, rising costs, and a shifting industry focus toward newer technologies further compound these challenges.

However, there are ways in which operators can mitigate the challenges they face. By having legacy support from Penta’s expert engineers, operators can ensure optimal performance on the existing network and drastically reducing their OPEX at the same time.

If you wished to discuss how Penta could support your current network, please email [email protected].

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