Cisco has confirmed that the recent disruption in its supply chain was a direct result of the larger global semiconductor shortage.

CFO Scott Herren estimated in an earnings call on Wednesday that supply chain issues, which impact the current quarter’s adjusted gross margin forecast, could last until the end of 2021, with a possibility that they will extend until 2022.

“I think the supply chain issues will stay with us at least until the end of this calendar year,” he told attendees, adding that Cisco had “locked down both supply and prices with some of the major component suppliers ”.

While no details were given on the call, a company spokesperson has since confirmed to IT professional that supply chain problems were linked to the global semiconductor shortage, which plagued the tech and automotive industries throughout the duration of the pandemic.

“Due to material shortages in the semiconductor industry that are beyond our control, Cisco is experiencing extended delivery times on some components. While the impacts are not widespread across all Cisco products, there are delays in production schedules for some product families, ”the spokesperson said. IT professional.

They added that the situation is expected to last until the end of our current fiscal year and into the next, as efforts to increase capacity materialize and demand stabilizes.

“Cisco has and will continue to be proactive in mitigating the impacts of these supply constraints and we are working closely with our network of suppliers and manufacturing partners to minimize delays and expedite customer orders.” they added.

The confirmation comes weeks after CEO Chuck Robbins told the BBC that it would take “another six months to get through the short term” of the global chip shortage, adding that the crisis is unlikely to be completely resolved before 2022.

“Suppliers are developing more capacity. And it will get better and better over the next 12-18 months,” he said, adding that the shortage was due to unprecedented demand for semiconductors, which ” goes in almost everything “.

The shortage is what could have prompted the company to acquire factory-less semiconductor company Acacia Communications, which was announced as finalization on Wednesday. Cisco also reported 10% annual growth in total orders, the highest demand for its products in nearly a decade.

The company generated revenue of $ 12.8 billion, up 7% year-over-year, with continued momentum to transform its business into software and subscriptions. According to the company, 81% of software revenue was sold as a subscription, up from 76% in the last quarter.

Featured Resources

Virtual offices and apps for dummies

A simple guide to virtual desktop infrastructure, end-user computing, and more.

Download now

The total economic impact of optimizing and managing your hybrid multi-cloud

Cost savings and business benefits of accelerating the cloud journey

Download now

A Buyer’s Guide to Cloud-Based Phone Solutions

Finding the Right Phone System for Your Modern Business

Download now

What is the next step for the education sector?

A new learning experience

Download now