As AI infrastructure demand surges, shortages in semiconductors and advanced packaging are driving up telecom equipment prices globally, threatening network expansion plans and increasing costs for operators and enterprises alike.
Artificial intelligence is no longer just reshaping data centres; it is beginning to ripple through the cost of telecoms equipment as well. TeckNexus said the latest pressure on network kit is being driven by the same semiconductor, memory and advanced packaging constraints that are lifting prices across the wider AI supply chain, leaving operators facing a more expensive procurement environment than many budgets assumed at the start of the year.
The clearest reason is that AI infrastructure and network gear now compete for much of the same industrial base. A report cited by Tom’s Hardware described the current market as a “giga cycle”, with AI spending pushing up demand for memory, networking and storage at the same time. Gartner, as reported by ITPro, has forecast global semiconductor revenue to reach a 20-year high in 2026, while Creative Strategies expects the market to top $1 trillion by 2028 or 2029. In that setting, even products that have nothing to do with AI, including radios, basebands and customer premises equipment, can become more expensive because the chips inside them come from the same strained supply pool.
Ericsson has been explicit that it is trying to pass some of that pressure through. According to Moneycontrol, the company has begun raising prices on new tenders and is also seeking increases from existing customers, while working on cost reductions, supply chain changes and product substitutions. The Swedish vendor has indicated that the adjustment cycle could take roughly six to nine months, which suggests the pricing shock may outlast the current procurement round for many buyers.
The risk is especially sharp in India. Analysts quoted by Moneycontrol said Vodafone Idea could be the hardest hit as it pushes ahead with 5G investment, partly because tighter margins leave less room to absorb equipment inflation. That matters beyond one operator: if a market is already running lean, any jump in chipset, memory, printed circuit board or raw material costs is more likely to appear quickly in network rollouts, fixed wireless access deployments and tariff discussions.
For enterprises planning private networks, the practical response is to build the inflation risk into total cost of ownership models now rather than waiting for the next tender. That means stress-testing budgets against a step change in equipment prices, checking whether contracts contain any automatic price-adjustment language and deciding whether to lock in supply earlier or wait for vendor redesigns and substitutions to work through. As several supply-chain and semiconductor reports have noted, the pressure is broad-based and unlikely to disappear quickly, so assumptions based on last year’s pricing may understate the real cost of a deployment signed today and delivered in the months ahead.
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