- CommScope expects up to $15M in tariff impacts in Q2, mainly affecting its Ruckus biz
- Cable vendors are in the front line of tariff uncertainty
- CommScope also eyes ample opportunity in data centers and enterprise fiber
Tariffs are coming (probably), and regardless of their final form, CommScope expects its financials to take a minor hit.
CommScope CEO Chuck Treadway said the company will likely see an estimated $10-$15 million “growth impact” from tariffs in Q2 2025. But he reassured investors on Thursday’s earnings call that CommScope has a “very flexible” global manufacturing footprint and is prepared to mitigate most of that impact later this year.
Roughly 80% of CommScope’s U.S. sales in Q1 involved products that were either sourced in the U.S. or are USMCA-compliant, Treadway noted, such as components made in Mexico or Canada.
“The only business that really was an outlier is our Ruckus product line,” he said, referring to the company’s suite of enterprise Wi-Fi products, network switches, Ethernet and more.
Most of the Ruckus products are manufactured in Vietnam and Taiwan, “a large portion” of which are exempt from tariffs, Treadway added. The Trump administration has said certain electronics, like semiconductors, smartphones and electronic integrated circuits, won’t be affected by reciprocal tariffs. Of course, that could change at any time.
Tariffs threaten cable supply chain
The cable equipment market isn’t necessarily safe from tariffs either. CommScope and other vendors that produce components outside the U.S. will likely be impacted by tariffs “at any level,” according to Dell’Oro Group VP Jeff Heynen.
“We suspect that these manufacturers are either looking to relocate these facilities or manufacturing to the U.S. or are seeking waivers in order to satisfy growing demand from Comcast, Charter, Cox and others,” Heynen wrote in a blog.
Cable vendor Harmonic is in a similar boat as CommScope. CEO Nimrod Ben-Natan said this week Harmonic anticipates “more significant” tariff impacts to its broadband business compared to its video unit, because the “vast majority” of Harmonic’s broadband nodes are manufactured in Malaysia.
“It’s important to note that to date, we have not seen any change in our customers’ behavior due to the tariffs,” said Ben-Natan.
“This continues to be a fluid situation as we work through options on mitigating the short term impact, as well as we look at longer term supply chain options pending a final outcome on what the tariffs will be across different countries," he added.
CommScope sees data center, vCMTS gains
Even with tariffs looming, CommScope eyes ample opportunity in the booming data center market.
Enterprise fiber made up 29% of first quarter Connectivity and Cable Solutions (CCS) revenue, Treadway said, driven not only by data center growth but also demand for products that can be used in “generative AI-focused” data center architectures.
“These AI builds use large language model training clusters and can require upwards of 10 times the number of fiber connectivity versus a traditional compute cluster,” he said.
CommScope is also seeing some benefit from its $45.1 million acquisition of Casa Systems’ cable assets. Without delving into too many details, the company noted it’s “very pleased” with the purchase and is starting to see some “really nice wins” in the virtual CMTS space, a field where competitors Harmonic and Vecima are plenty active.