ZTE: US sanctions threaten company’s survival

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The US sanctions against the Chinese telecom giant ZTE threaten “the survival and development” of ZTE, the company said in a response. In addition, the US government also affects US companies with the ban.

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

ZTE says it will oppose the ban, including through legal means. The US imposed the trade restriction because ZTE failed to comply with imposed disciplinary measures. The penalties were imposed on the Chinese smartphone manufacturer for supplying products to Iran, thereby circumventing US sanctions.

ZTE has several US suppliers, all of which are affected by the trade ban, according to ZTE. The best known of these is chip designer Qualcomm. Qualcomm socs are in a majority of ZTE’s smartphone models, which shipped 46 million units last year. If Qualcomm gets a few bucks for the soc and licenses, the damage for the American company quickly runs into hundreds of millions of dollars.

In addition to smartphones, ZTE also supplies network equipment to providers. Suppliers of these are also located in the US. Acacia Communications derives 30 percent of its revenue from deliveries to ZTE. Oclaro is dependent on the company for 17 percent of its revenue. Lumentum Holdings, Finisar, Inphi, Fabrinet, NeoPhotonics and Applied Optoelectronics also supply components to the Chinese company.

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

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