Supply chain constraints catch up with Casa Systems | Light reading

2021-11-25 06:32:35 By : Ms. Natalie Huang

Casa Systems successfully avoided supply chain restrictions in the first half of 2021, but stated that they will begin to peak in the third quarter of 2021 and expect this trend to continue until at least the end of 2021.

Therefore, Casa stated that it suffered a loss of $11 million in the third quarter due to supply chain constraints, which had a particularly serious impact on the company's wired access network business.

Jerry Guo, President and CEO of Casa, told Light Reading that a variety of cable components, including PHY and RF components, are "in short supply." He said that Casa was also surprised to find that some suppliers violated Casa's orders for certain components.

Guo said the reason is not fully understood, "but suddenly, some suppliers who encountered delivery problems stopped production." "But it's a surprise."

This means that the delivery time of certain components has been delayed to a year or more. "We do plan ahead for some of these plans, but you can't plan ahead for everything," Guo said.

Casa expects this problem to penetrate into the fourth quarter of 2021, but it is taking action and hopes to relieve some of the pressure in the first half of 2022. However, as demand is still high, the company is still optimistic about its overall business.

Casa’s Chief Financial Officer Scott Bruckner told Light Reading that before supply chain issues and software order delays for certain customers began to appear around mid-October, “We are on track to have an amazing quarter. ". "We have always seen that, regardless of supply chain delays and launches, the demand for everything, especially the demand for wireless, continues to surge for us. We feel very good about it."

Casa's revenue for the third quarter of 2021 was US$99.21 million, which was lower than the US$10574 million in the same period last year and also lower than analysts’ expectations of US$106.5 million. Wireless is now Casa’s largest business unit, with revenues of 44.21 million U.S. dollars, followed by cable television (34 million U.S. dollars) and fixed telecommunications (21 million U.S. dollars).

Casa now expects revenue for the fourth quarter to be between US$98 million and US$108 million, which is lower than Wall Street’s initial forecast of US$127 million. In midday trading on Wednesday, Casa's share price fell 80 cents (11.92%) to $5.91 per share.

Even if Casa deals with supply chain constraints that affect cable components, suppliers are seeing increased demand for next-generation network projects, including migration to distributed access architecture (DAA) and "medium separation" and "high separation" upstream bandwidth upgrades.

"We are having a lot of discussions with customers about high and medium scores," Guo said. "How fast it rises, we don't know yet."

As for DAA, Casa is continuing to deploy remote PHY nodes, pushing the physical layer of the Cable Modem Termination System (CMTS) into the nodes. But it saw a "stronger interest" in remote MACPHY, and it also packaged software and processing into nodes.

Guo attributed this in part to customers’ desire to simplify their headends and hubs, as well as the emergence of controllers for the new CableLabs-specified Flexible MAC Architecture (FMA), which help eliminate concerns about remote PHY and remote The MACPHY controversy.

"We believe that the core of the original CCAP [Converged Cable Access Platform] will be replaced by an FMA controller," he said, noting that Casa has "today's functional FMA controller."

In terms of wireless, Casa had a backlog of US$101.2 million at the end of the quarter.

Casa is optimistic that more cable operators will use fixed wireless access (FWA) more actively in rural areas. It is worth noting that the company hopes that more MSOs can follow in the footsteps of Mediacom Communications. Mediacom Communications has begun to launch a service called Mediacom Bolt that utilizes the CBRS spectrum.

"I think everyone is paying attention to this to see how successful they are," Guo said. "We are very optimistic that they will set an example for many MSOs and some smaller telecommunications companies."

Casa is attacking this market with multiple elements, including packet cores, CBRS radios, and fixed wireless customer premise equipment (CPE). Casa believes that with the help of the Federal Rural Digital Opportunity Fund (RDOF), the product lineup will also play a role in the deployment. Casa also targets RDOFs with fiber optic extenders.

It is expected that Casa will provide more details on how it responds to the supply chain and revisions to its outlook on the Analyst Day scheduled for November 19th.

Related posts: Casa Systems acquires a part of Mediacom's wireless business. Casa Systems and Canadian Bell Company entered into a 5G fixed wireless deal. Casa Systems said that wired network upgrade activities are heating up and wireless speeds are leading the Casa Systems Charter test high fork and preparation for CBRS field trials Status early 2022

— Jeff Baumgartner, Senior Editor, Light Reading

© 2021 Light Reading, part of Informa Tech, a division of Informa PLC.