Recently, network equipment manufacturers have delivered brilliant third-quarter financial reports, achieving continuous growth in gross profit margins. Many manufacturers are optimistic that demand will continue to pull goods next year, but pointed out that the shortage of chips and components will continue, coupled with the port plug problem , Which will bring uncertainty to shipments. For this reason, some customers have placed orders in advance for stocking.

Gordon Yang, CEO of Zyxel Investment Controls, said that remote work and learning have promoted the rapid growth of demand for network services and equipment. New laptops, smart home devices and wearable devices have stimulated consumers to use high-speed Internet solutions for all of their products. The line created the momentum of shipment growth. For example, the company's sales of equipment solutions for Wi-Fi applications are expected to increase by 20% year-on-year in 2021 and 2022.

But Yang emphasized that the only variable that may affect its revenue performance is the shortage of network chips, which is expected to continue into the first half of next year. In the case of a shortage of chip components, its capacity utilization rate will fluctuate, which will affect production efficiency, increase production costs, and put pressure on its overall business operations.

Denise Lin, CEO of Zyxel Technology, a subsidiary of Zyxel Investment Control, also pointed out that the delivery cycle of core network chips has been extended from 26-30 weeks to 52 weeks in the second quarter of 2021, which will continue to affect the company's network equipment and solutions. Shipment of the plan. It is estimated that the chip supply gap may reach 20% in the first half of 2022, especially in the second quarter.

April Huang, chairman of Zhongqi Technology, said that in addition to the shortage of chips, the entire supply chain will continue to face many negative factors, including port congestion in the first half of next year, prompting customers to place orders with network equipment suppliers in advance. She revealed that her company has secured orders that will be completed in 2022.

According to Huang, Zhongqi Technology and its peers are now able to pass on the increased production costs to customers, mainly because customers are more willing to accept their price increases to ensure early delivery and avoid greater losses, thereby effectively pushing Increase their gross profit margin.