Fiber operators faced a tough environment in 2022, with fiber supply lead times stretching to a year or more. A new report from the Fiber Broadband Association (FBA) showed conditions had dramatically improved as of Q1 2023, but warned another expected spike in demand could soon disrupt the supply chain once again.
FBA’s supply chain working group last summer produced a report which indicated lead times for fiber optic cables hit 52 to 60 weeks, while lead times for multiport terminals and other key products ranged from 20 to 35 weeks. But as of last month, those timeframes had dropped to 4 to 10 weeks and 4 to 8 weeks, respectively.
Optical line terminals and optical network terminals now have an 8 to 16 week lead time while home gear and CPE has a 4 to 10 week lead time. The latter is down from 3 to 6 months during the summer of 2022.
According to the report, last year’s monster lead times were caused by unprecedented demand and a perfect storm of factors which strained all elements of the supply chain. For instance, while fiber optic glass was readily available, access to the plastics used to coat it were heavily dependent on the availability and price of petroleum. Elsewhere, semiconductor production was hindered by a lack of access to neon which had historically been supplied by factories in the Ukraine. And, of course, Covid-related shutdowns and labor shortages impacted lead times for shipping and workforce availability.
Conditions have much improved now. FBA CEO Gary Bolton told Fierce that’s in large part because of adjustments that larger operators made to their build plans in Q1 2023, which have allowed the supply chain to catch its breath and catch up to demand. He also pointed to the opening of new fiber manufacturing facilities as a contributing factor to the improvements. Indeed, Corning and CommScope last week both announced the launch of new fiber production lines in North Carolina.
But both Bolton and the FBA report warned the break won’t last.
“While we have seen some relief in the supply chain in 1Q23, we expect to see an uptick in demand going forward, therefore we encourage companies to continue to put a hard focus on long range planning and providing accurate forecasts to their suppliers,” the report stated.
While the report didn’t say what exactly will cause the uptick in demand, builds fueled by the $42.5 billion Broadband Equity, Access, and Deployment (BEAD) Program will likely be a major contributing factor. The government expects to announce BEAD allocations this summer, meaning money could begin flowing later this year or early next. One would expect that as soon as there’s certainty around funding opportunities, order volumes will begin to tick back up, perhaps as soon as Q3.
The other outstanding question is the degree to which lead times will rise again.
As this point, FBA Supply Chain Working Group Chair Scott Jackson said “It’s a best guess. And most of us feel like it won’t go to what it was because manufacturers are adding capacity that’s coming online. So, we don’t think it’s going to get as bad but they are going to go out.”