2026-07-08Why Is Networking Equipment Becoming More Expensive?
In recent years, networking equipment has become increasingly expensive across the world. Alongside rising prices, businesses are also experiencing longer delivery times and greater uncertainty when planning IT projects. So, what's driving these changes? The answer lies in a major shift happening across the global technology industry. As Artificial Intelligence (AI) continues to grow, it is changing the demand for the hardware that powers not only AI systems but also the networking equipment businesses rely on every day.
AI Is Reshaping the Hardware Market
AI applications require enormous computing power, which means technology companies are investing billions of dollars in new AI data centres. Dell recently reported over $51 billion in AI server orders waiting to be fulfilled, while global investment in AI infrastructure is expected to grow from $334 billion in 2025 to more than $900 billion by 2029. Meeting this demand requires huge amounts of processors and memory chips, putting pressure on the global supply chain.
How Does This Affect Networking Equipment?
Routers, switches, firewalls, and wireless access points all contain processors and memory, just like servers. To meet the growing demand for AI, manufacturers have shifted more production towards specialised memory used in AI systems. This leaves less conventional memory available for networking equipment and other IT devices. As supply becomes tighter, prices naturally increase.
Industry analysts report that DRAM prices have risen by more than 170% year over year, while the cost of memory used in networking products has increased by almost seven times. Those higher manufacturing costs are eventually reflected in the price businesses pay for new equipment.
What Does This Mean for Businesses in East Africa?
The impact of these global supply chain changes is often felt more strongly across East Africa.
Unlike many larger markets, businesses in the region rely heavily on imported networking equipment. By the time a router, switch, or wireless access point reaches a local distributor, it has already passed through a long supply chain involving international shipping, customs clearance, regulatory requirements, and local distribution. Recent increases in global shipping costs have added even more pressure. Higher fuel prices and ongoing geopolitical tensions have pushed freight costs up by an estimated 20–40%, making imported IT equipment more expensive before it even arrives in the region. The impact goes beyond transportation. Many networking products, including Ethernet and fibre optic cables, use petroleum-based materials for their outer jackets and insulation. As oil prices rise, manufacturing these products becomes more expensive, further increasing the overall cost of networking infrastructure.