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Network device makers remain upbeat about 2H22 outlook

Aaron Lee, Taipei; Steve Shen, DIGITIMES Asia 0

Credit: DIGITIMES

Taiwan-based network device makers remain optimistic about their business prospects for the second half of 2022, citing demand for broadband upgrades, particularly in North and Latin America.

Two sources of order dynamics will come from North and Latin America. The first is that telecom operators in these regions will continue to pull in network equipment to meet enterprise digital transformation needs and network services upgrades.

Second, many governments there have set aside budgets to expand their respective broadband infrastructure, such as a US$65 billion budget that the US government has committed to enhancing its basic infrastructure.

Taiwan-based network equipment providers, including Sercomm, Arcadyan Technology, Unizyx Holding, Gemtek Technology, Wistron NeWeb and ATW Technology, will likely benefit from the emerging dynamics.

The construction of telecom infrastructure in the US will push telecom operators to upgrade their networks to serve better consumers' demand for more comprehensive broadband under the new lifestyle brought about by the COVID-19 pandemic, said sources at Sercomm.

Sercomm expects its sales to grow substantially quarter by quarter in the year's second half, with most of its production lines enjoying strong shipment dynamics.

Meanwhile, the sources added that Sercomm has seen its order visibility extend to the first half of 2023.

Arcadyan is optimistic about the second half of the year, looking to achieve its goal of a double-digit growth set for this year.

In response to customer needs, Arcadyan has initiated a second-phase construction project at its plant in Vietnam, with the new capacity to come online by year-end 2023, according to company sources.

The sources added that while demand for consumer electronics has been affected by rising inflation in Europe and the US, household demand for broadband Internet has continued to grow and is likely to persist into 2023.

ATW Technology, which offers indoor and outdoor wireless access points, IoT solutions and others, said its networking products have cut into the supply chains of telecom operators in Mexico.

According to sources at ATW, the company's shipments to Mexico have expanded fast since March this year, resulting in significant growth of its revenue.

The company posted revenue of NT$812 million (US$27.61 million) in June, a whopping growth of 573.61% from a year earlier.

Meanwhile, the company has approached new telecom clients in Latin America and expects to ink new sales contracts by the end of this year.