MLCC chips

The Trump Administration’s trade war with the global supply chain may worsen an already growing electronic parts shortage that is affecting cable modem production.

Fierce Cable reports smaller cable operators are being warned to expect price increases due to an ongoing shortage of multilayer ceramic chip capacitors (MLCC’s), an important part in cable modems. That warning came in an email message sent by the National Cable Telecommunications Cooperative, a group that helps independent cable companies pool resources to get group discounts on cable television programming and equipment.

“NCTC is continuing to track the impact of this issue on our supply chain, and we will communicate price changes and lead time delays as we learn of them,” the email read. “Member operators should be aware that the order delays and price increases can be significant, so place your blanket orders as soon as you possibly can.”

Some smaller cable operators are already affected, with one midwestern provider telling Fierce Cable his company cannot even place orders with some DOCSIS 3.0 modem vendors.

“Arris and Hitron told us we can’t get 24 or 32 [channel] modems, with no estimated timeframe,” the executive told Fierce. “Only about 20,000 are available, possibly in August, for the whole country from various vendors.”

There are multiple challenges impacting the electronic industry these days:

• increasing demand among manufacturers incorporating more electronic parts into products like appliances, automobiles, monitored medical equipment, and the wireless industry.
• growing concern over the Trump Administration’s escalating trade tariffs on items manufactured in China. The first $35 billion in new tariffs will impact important components like batteries, capacitors and touchscreens.
• increasing lead times to complete orders for electronic components are exacerbating shortages. An order for MLCC chips now takes up to 50 weeks to complete by some manufacturers.

As supplies of electronic components tighten, the first response is to raise prices to curtail demand. As the shortage worsens, buyers face quantity limits and/or refused orders. Some of the worst shortages now affect MLCCs, resistors, semiconductors, and graphics cards.

Last week, President Trump threatened to sharply escalate the trade conflict with China, asking his administration to identify an additional $200 billion in imported goods from China to be penalized with additional tariffs.