ZTE: American sanctions threaten survival company

Apr

20

2018

The American sanctions against the Chinese telecom giant ZTE threaten the ‘existence and development’ of ZTE, the company says in a reaction. In addition, the American government is also hitting American companies with the ban.

American companies are not allowed to supply components to the Chinese company in the coming seven years. ZTE finds it unfair that the US imposes the sanction for seven years before the investigation into the case is completed. ZTE also believes that the US government does not take into account the measures it has taken in the past year to comply with US regulations. The manufacturer says there in the past year fifty million dollars have been put in.

ZTE says that it will oppose the ban, including through legal means. The US imposed the trade restriction because ZTE did not comply with imposed disciplinary measures. The punishments were imposed on the Chinese smartphone manufacturer because it supplied products to Iran and thereby circumvented US sanctions.

ZTE has several American suppliers, which according to ZTE all suffer from the trade ban. The most famous of these is chip designer Qualcomm. Qualcomm-socs are in a majority of ZTE’s smartphone models, which delivered 46 million devices last year. If Qualcomm gets a few bucks for the soc and licenses, the damage to the American company will soon run into hundreds of millions of dollars.

In addition to smartphones, ZTE also supplies network equipment to providers. There are also suppliers in the US. Acacia Communications achieves thirty percent of its sales from deliveries to ZTE. Oclaro depends on the company for seventeen percent of its turnover. Lumentum Holdings, Finisar, Inphi, Fabrinet, NeoPhotonics and Applied Optoelectronics also supply components to the Chinese company.

ZTE Axon M
The ZTE Axon M, with two screens and with a Snapdragon 821-soc from the American Qualcomm

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