Ericsson and Nokia warn AI demand is raising telecom equipment costs

TL;DR: Ericsson and Nokia said demand for AI infrastructure has tightened component supply and increased chip costs for telecom network equipment, according to a Light Reading report. The vendors said those cost pressures could reach telecom operator customers if higher input costs persist.

Ericsson and Nokia warned in Light Reading's report that AI-related demand is making telecom equipment more expensive by increasing competition for semiconductors and other components used in network hardware. The report said strong spending on AI systems has contributed to shortages in parts needed by telecom equipment vendors.

The reported cost pressure centers on chips used in telecom network equipment. Light Reading said demand from AI deployments has driven up semiconductor prices, creating a more expensive supply environment for vendors such as Ericsson and Nokia as they build equipment for mobile and fixed network operators.

Ericsson and Nokia said telecom customers may ultimately face those higher costs. Light Reading reported that if vendors continue to pay more for components, some of that increase could be passed on to operators that buy network equipment.

Related questions

• How is AI demand affecting semiconductor costs for telecom vendors?
• Why do Ericsson and Nokia say telecom equipment is becoming more expensive?
• Could higher AI-driven chip costs be passed on to telecom operators?