In an ambitious move, US President Biden announced a $42bn allocation from the infrastructure law to build high-speed broadband networks across the United States. The funding, set to be released progressively, aims to provide all American homes with fast internet access by 2030.
Several Taiwanese telecommunication manufacturers, including Zhonglei, Qiqi, Zhiyi, Zhongqi, and Zhengwen, could reap the benefits of this project, given their significant focus on the American market. The top contributor, Zhongqi, derives around 80% of its revenue from North America, followed by Qiqi at 60%. Other manufacturers generate about half their revenue from the US market. This injection of nearly NT$1.3tn in American subsidies could trigger a massive wave of telecommunications equipment replacements, creating substantial business opportunities for these firms.
Biden asserted, during his week-long campaign promoting “Bidenomics” on the 26th, that these investments would benefit all Americans, drawing parallels with President Roosevelt’s rural electrification efforts in the 1930s.
The $42bn fund, legislated by Congress through the Infrastructure Act, will be overseen by the US Department of Commerce. Each state is set to receive a minimum of $107m, with 19 states set to receive over $1bn.
Commerce Secretary Raimondo affirmed the investment’s benefits for national economic growth and competitiveness in the forthcoming year, highlighting its capacity to link people to the digital economy, stimulate domestic manufacturing of fibre optic cables, and create well-paid jobs.
Industry analysts believe Biden’s broadband infrastructure plan, coupled with encouragement for investment in remote rural development, could boost Taiwan’s broadband orders from North America.
Taiwanese manufacturers are well-positioned to capitalise on this demand for fibre optic broadband upgrades. Zhonglei, having firmly established its presence in North America, continues to expand its market share with key telecom operators and is already shipping its 5G FWA products to the three leading telecom operators in North America.
Similarly, Qiqi generates over 60% of its revenue from the Americas, with a product range that includes optical fibre, 5G FWA, and corporate network communications. It is actively increasing its direct supply business with telecom operators and cable TV. It has also entered the smart home Internet of Things and video streaming set-top box sectors, and provides satellite broadband user equipment.
Other manufacturers such as SmartEasy are similarly advancing in the North American market, with SmartEasy delivering its 5G FWA as one of its main products.
With the North American market accounting for about 80% of its revenue, Zhongqi has secured orders for cable TV broadband internet access equipment and expanded its product line in collaboration with its parent company Mingtai. The latter also relies heavily on the American market, with over 50% of its revenue derived from there. New orders from new American customers for wireless broadband products are set to be steadily delivered in 2022, with continued growth in demand from the North American market for GPON and XGSPON broadband products.