Impact to the Supply Chain From the Trade War Varying Greatly Amongst Suppliers, According to 650 Group

1Q19 Results and 2Q19 Forecast Very Different in the Cloud, Enterprise, and Telco Service Provider Markets

Portola Valley, California – June 18, 2019 – Newly released reports by 650 Group, a leading Market Intelligence Research firm for communications, data center, and cloud markets, indicates that the supply chain is not being impacted the same way by the war with system and component suppliers having different exposure in the enterprise, cloud, and service provider supply chain. 

“Some markets, like the Enterprise WLAN market, saw an immediate negative impact coincident with the escalation of the trade war,” said Chris DePuy, Founder and Technology Analyst at 650 Group.  “For instance, in 1Q19, Enterprise WLAN revenues in China were down year-over-year.  Additionally, the WLAN semiconductor industry is undergoing significant changes in part due to disruption in the supply chain.”

“In late 2018 and early 2019, North American vendors with exposure to Enterprise and Cloud markets experienced relatively stronger year-over-year results than Chinese competitors,” said Alan Weckel, Founder and Technology Analyst at 650 Group.  “As a result of short buying cycles and robust competition, we expect the markets serving Enterprise and Cloud service providers will experience a relatively smaller percentage hit from the impact of the trade war compared to that of the telecom industry.  However, the impact may not be uniform because multi-vendor projects that involve suppliers caught up in the trade war may be put on hold until substitute vendors are named.”

The newly released research also indicates that certain market categories, such as telecom equipment, may decline during the trade war and will gradually rebound over the long term, while other markets, such as Ethernet Switching or servers will more rapidly recover after vendor swap-outs by the end of 2019.

About the Ethernet Switch Quarterly Report
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About 650 Group
650 Group is a leading Market Intelligence Research firm for communications, data center, and cloud markets.  ​Our team has decades of research experience, has worked in the technology industry, and is actively involved in standards bodies.