The Rise of Chinese Suppliers in Telecommunication
Open Compute Project (OCP) is an organization aiming to design and enable the delivery of the most efficient server, storage and data center hardware designs for scalable computing. The exhibition OCP 2018 was held in San Jose in March with a bunch of cutting-edge latest technology astonishing the attendees. Still, several companies like Eoptolink, 10Gtek, and Mellanox stood out among a whole lot of industry titans and coincidentally, most of them are from the largest economic body in Asia, that’s China.
Instead of being known as the factory of the world, China is gaining a new fame by exporting its own products and obviously, the Chinese suppliers are playing an important role in this process. The global market shares of Chinese suppliers have increased from 19% in 2010 to 36% in 2016 and it’s still going up. Meanwhile, industry titans Finisar, Lumentum, and Oclaro lost 20% of their market shares during the past four years.
Flexibility is now a strong advantage for Chinese suppliers. Basically, they can make anything they want as long as there is a potential market and anything is possible within this largest economic body where there are complete supply chains for every area. When it comes to telecommunication, Chinese suppliers are seeking an alternative material for products that are going to be exported to the USA since aluminum is not likely allowed now. For example, according to a reliable leak, 10Gtek is about to release products made with plastic components which could definitely meet the imminent need in relation to the trading relationship between China and America.
The convenient labor force was one of the reasons why you could easily find a supplier who can provide high-quality products with competitive price in China. Although southeast countries have the lower price of the labor force, it’s still too early for them to take part in supplying products for telecommunication because of lack of proper supply chains and necessary technique. Any of those factors could cause the price high or delay of lead time.
Being excellent at the technique is a new feature of Chinese suppliers as well. After all those years in manufacturing, Chinese suppliers have equipped the finest devices for testing and producing components. Chinese suppliers now are ready to embrace the age of 5G since Huawei has accomplished the communication test of 5G in February this year for the first time. The fact is 10Gtek is going to provide QSFP-DD DAC soon and the other suppliers are speeding up their paces to join this competition.