The U.S. tech supply chain is “more constrained” than previously thought, but consumer demand for tech goods “remains robust,” reported S&P Global Ratings Monday. It’s forecasting supply constraints “will ease only slightly” in 2022, “as capacity additions are not likely to make a significant difference” until late in the year. “Semiconductor production is becoming structurally more capital intensive because manufacturing at the leading edge nodes is more complex,” said S&P. “Industry and governments have a greater desire for regional diversity to mitigate geopolitical risk,” and that bodes well for “semiconductor capital equipment makers,” it said.

The optical fiber that Corning supplies is a “critical enabler” for U.S. 5G deployment, and fiber networks “are the path forward to transmitting petabytes of data to people and devices instantly,” said the company in comments posted after hours Friday in docket BIS-2021-0021. The Commerce Department’s Bureau of Industry and Security sought industry comment to help the secretaries of Commerce and Homeland Security prepare a report to the White House by the one-year anniversary of President Joe Biden’s Feb. 24 executive order on supply chain disruptions in the “critical sectors and subsectors” of the information and communications technology “industrial base” (see 2111050041). Wireless networks “are moving from one optical connection per hundreds of thousands or even a million clients to one optical connection for fewer than 100” mobile phones, IoT devices or homes, said Corning. It continues to invest in R&D “at a much higher rate than our peers,” it said. The document is heavily redacted to hide information the company said “is not publicly available, pertaining to Corning’s business or trade secrets.” Also expunged are pages of Corning’s policy recommendations for identifying ICT supply chain risks and fixing the bottlenecks, except for a single sentence in a “workforce needs” section. Hiring, developing and retaining a high-skilled workforce, said Corning, is “paramount to the continued success” of ICT manufacturing. Q3 revenue in Corning’s optical communications business grew 24% year over year to $1.1 billion. It recently expanded its AT&T collaboration to bolster investments in fiber infrastructure, widen the availability of U.S. fiber-to-the-home broadband networks and speed 5G deployment.

Imports through congested U.S. retail ports are expected to remain at near-record levels for the rest of the year, “as retailers rush to move merchandise from docks to shelves in time to meet the expectations of holiday shoppers,” reported the National Retail Federation Monday. U.S. ports handled 2.14 million 20-foot cargo containers or their equivalents in September, down 5.9% from August but up 1.4% year over year, said NRF. It’s projecting October imports will be down 1.2%, the first year-over-year decline since July 2020. Even with the decline, October “would be among the five busiest months on record since NRF began tracking imports in 2002,” it said. “Busy cargo is expected to continue through the end of the year,” rising 3.3% in November and 3.5% in December, it said. “Dockworkers are unloading ships as fast as they can, but the challenge is to move the containers out of the ports to make room for the next ship,” said Jonathan Gold, NRF vice president-supply chain and customs policy. “Retailers have enough inventory on hand to make sure shoppers won’t go home empty-handed this holiday season. But there are still items sitting on the docks or waiting on ships that need to make it to store shelves and online sellers’ warehouses.”

Despite supply chain constraints that are affecting many industries, GoPro “successfully partnered with our suppliers to produce inventory to support our fourth quarter revenue expectations,” said CEO Nicholas Woodman on a Q3 call Thursday. GoPro’s online store and its retail partners “will be stocked and ready for shoppers this holiday season,” he said. GoPro’s “demand planning” resulted in its ability “to work with suppliers and our operations team to line up that supply” for the holiday period, said Chief Financial Officer Brian McGee, also the company’s chief operating officer. “We're right on track so far, even in the fourth quarter, from a sell-through perspective.” The company has been “very constructive with our suppliers on various fronts with what was needed into 2021,” he said. “We haven't wavered from that. Our demand and forecasting capability has hit right on target for where we needed to be.” The stock closed 8% higher Friday at $9.58.

EMarketer predicts many Apple Watch Series 7 and MacBook Pro M1 and M1 Max units ordered today won’t be delivered until early to mid-December, emailed the market research firm Wednesday. GPS and cellular Apple Watch Series 7 models we put in a virtual cart at Apple.com Wednesday showed a delivery window of Dec. 7-14. EMarketer also cited reports that Apple cut iPhone 13 production by 10 million units due to the chip shortage. Apple CEO Tim Cook said on an earnings call last week that chip shortages cost the company $6 billion in the September quarter (see 2110290040). Target and Apple doubled the number of store-within-a-store installations to 36 in time for the holiday season, eMarketer said. The spaces have Apple-trained Target tech consultants. Apple didn’t comment Wednesday.

Though semiconductor supply is the big unknown, Western Digital sees the total addressable market in PCs as “good next year,” said CEO David Goeckeler on an investor call Thursday for fiscal Q1 ended Oct. 1. “We're obviously coming off of a blockbuster year” for PC demand with COVID-19, he said. The pre-pandemic “baseline” for PC shipments was around 270 million units a year globally, he said. That’s expected to go up to 340 million this year, and about 335 million next year, he said. “We're hearing that from our customers. We're talking to those customers now about 2022 plans and what they plan to do, and how much supply they're going to need.” The supply chain challenges in the December quarter are expected to be “a little more challenging than what we saw in September, and the September quarter was not easy,” said Chief Financial Officer Robert Eulau. “It's a challenge that's not going to go away soon in terms of the semiconductor availability.” The scarcity in chip supply “has definitely broadened” from a few months ago, said Goeckeler. It started with some PC makers, and now, “we're hearing more about it in other segments, including the big data center providers,” he said.The stock closed 8.7% lower Friday at $52.29.

Reports of supply chain issues and product shortages prompted 48% of consumers to begin holiday shopping early, reported American Express Thursday, citing a poll of 2,000 U.S. consumers fielded Oct. 5-8. Eighty-one percent said it's important to buy gifts that support small or local businesses, 64% showed interest in gifts that had a favorable environmental impact, and 63% cited interest in gifts that were ethically sourced. Some 67% of respondents said they’re looking for offers or deals through their credit card; 57% plan to use credit card points for holiday shopping. Just over three-fourths said they would prefer to take a vacation with their significant other than to exchange gifts, said the report.

End-user demand in the PC segment “appears to be strong,” said Advanced Micro Devices CEO Lisa Su on a Q3 earnings call Tuesday. “There's a good amount of refresh going on, whether you're talking about consumer, high-end consumer, or commercial or gaming.” Supply constraints are expected to continue “into the first half of the year,” she said. “What we're using from a planning assumption standpoint is that the PC market may be flattish as we go from 2021 into 2022.” AMD brought on “a tremendous amount of additional supply” in the quarter, “and that's part of the reason that we overachieved the Q3 results,” said Su. Revenue in the quarter of $4.3 billion was 54% higher than a year earlier, beating the high end of the range in its July 27 forecast by $100 million. The PC market “is not necessarily constrained on CPUs, but more constrained on matched sets,” she said. “We're trying to ensure that we're not building inventory in the channel.”

Garmin typifies virtually all tech companies that are facing “one of the most challenging supply chain environments in history,” said CEO Cliff Pemble on a Q3 call Wednesday. “Supplies are tight, and we expect freight costs to remain elevated.” Operating profit declined nearly 11% year over year to $283 million, due partly to “higher freight costs affecting gross margin,” he said. Garmin invested in a fourth production facility in Taiwan that's now operational and “will help us fill more orders,” he said. “We’ve been able to secure the kind of inventory that we feel we need to make for a successful year,” said Pemble. “Nobody would ever say they have too much in this environment, and with shipping delays that are taking place that we hear of every day in the news, definitely a higher level of inventory is required.” Garmin sees little to no supply chain improvement “in the near to intermediate term that really changes what’s happening right now, until there is really more capacity brought into the system and some of these bottlenecks get solved,” said the CEO. Pemble answered with a simple “yes,” when asked if he’s confident in Garmin’s ability to have products on shelves for the holiday season. The stock closed down 8.8% Wednesday at $146.21.

Industry groups urged the FCC to act with caution on rules for secure telecom gear in U.S. networks, in comments posted through Wednesday in docket 21-232 (see 2110190072). “The record shows industry support for a narrow, targeted action based on an extensive factual record to block Covered Entities from U.S. markets,” the Telecommunications Industry Association said. Rules should be based on the Secure and Trusted Communications Networks Act and not Section 302 of the Communications Act, TIA said: “The record further highlights the costs of retroactively revoking existing equipment authorizations from Covered Entities, and while this action may have some benefits, the FCC must be cautious to ensure that the substantial costs do not outweigh the benefits to the public.” CTA also raised concerns. “While the NPRM is rightly aimed at reducing security threats from certain potential threats or bad actors, addressing network security through the equipment authorization process as the FCC has proposed could create implementation and compliance challenges for all participants,” the group said: “This is particularly the case for proposals to revoke existing authorizations and make changes to the Supplier Declaration of Conformity process, which will affect far more than the Covered List entities.” Adding “security requirements to product authorization approvals will create more issues than it will solve,” said the Mobile & Wireless Forum: “The current responsibilities of the FCC Lab are extensive without the addition of cybersecurity responsibility.” Others mostly supported FCC proposals. “Prohibiting the authorization of equipment on the Covered List is an appropriate regulatory response by the Commission following the Congressional determination that such equipment poses an unacceptable risk,” said Motorola Solutions.