In response to the US embargo decision, ZTE has established a "crisis response team" internally.
The Xinhua news reporter learned that ZTE Corporation’s internal letter on the morning of April 17th stated that the company attached great importance to it and established the Crisis Response Working Group at the first time. At present, the company analyzes and formulates countermeasures in various fields, and goes all out to meet the crisis.
ZTE Corporation encourages its employees in its internal communications: The road to any bright future is not straightforward, and the internationalization of the company is also accompanied by twists and turns.
Under the background of continuous trade frictions between China and the United States, ZTE’s embargo has been given more meaning by the United States. U.S. Secretary of Commerce Wilbur Ross revealed on April 16 that due to the failure of China Telecom’s ZTE to implement some of the agreements in the settlement agreement, the U.S. Department of Commerce will ban U.S. companies from selling components to ZTE, possibly for 7 years. .
On the morning of April 17th, ZTE issued a statement saying that it has been informed that the U.S. Department of Commerce has refused to activate the company. The company is fully evaluating the possible impact of this event on the company and actively communicating with and responding to various aspects. ZTE Corporation also issued an announcement saying that due to the company's major events that may have a significant impact on the stock price and have not been publicly disclosed, the market was suspended from April 17th, 2018, and trading resumed after the company published the relevant announcement.
35 personal bonus issues
The U.S. sanctions imposed on ZTE this time were due to an old case two years ago.
On March 8, 2016, the U.S. Department of Commerce accused ZTE of allegedly violating U.S. export control policies against Iran, imposing an embargo on ZTE, and prohibiting U.S. companies from selling products to ZTE.
In March 2017, ZTE authorized a penalty. According to the agreement signed by both parties, ZTE has to pay a total of 1.192 billion U.S. dollars to the U.S. government, of which 300 million U.S. dollars are deferred. If the agreement is not violated within 7 years after the agreement is signed, the fine will be exempted from payment.
In addition to fines, ZTE also conducted internal control reforms and fired the top three executives of the company’s CEO.
However, the latest position of the U.S. Department of Commerce is that ZTE has made many false statements. The U.S. side claimed that according to the agreement, ZTE promised to dismiss 4 senior employees and punish 35 employees by reducing bonuses or penalties. However, ZTE dismissed only 4 senior employees and did not penalize or reduce the bonus of 35 employees.
In response to this allegation, the outside world is also quite confused. On the major issues concerning the survival of enterprises, why is ZTE so rash?
Regarding this point, the ZTE official has not explained this.
However, an internal ZTE reporter told reporters that according to the agreement, the U.S. is entitled to monitor the income status of the 35 employees. If ZTE does issue bonuses to the 35 employees, it indicates that this was previously authorized by the U.S. side. However, it was later approved by the US for later repentance.
In any case, ZTE has become the first large-scale technology company affected by this round of Sino-US trade warfare.
U.S. side "card neck" how to deal with the Chinese side
On the evening of April 16, the U.S. Department of Commerce retransmitted the news of the ZTE embargo back to China. China’s semiconductor professionals have alluded to the United States’ move to engage in large Chinese companies and are “card necks”. China’s semiconductors have not been able to achieve complete domestic substitution in many aspects, and will cause the entire Chinese semiconductor industry to become passive.
The semiconductor industry also fears that this round of embargoes will not only be a problem for ZTE. ZTE's enterprises in the industry chain will suffer, which will cause deep impact on the Chinese semiconductor industry. “If the crisis needs to be resolved, it needs the Chinese and US governments. Negotiations require some exchange of interests. ”
Many people in the semiconductor industry believe that the U.S. side once again took ZTE's embargo case and said that the main purpose is to increase the bargaining bargaining power between China and the United States, and even pressure China’s Ministry of Commerce to buy Qumcom’s NXP case and demand that China The government approved the transaction.
A correspondent of ZTE employees told reporters that at present, the situation is not fully grasped by the company. This has risen to the level of the Chinese and U.S. governments.
Huawei’s rotating chairman, Chairman Xu Zhijun, when asked about Sino-U.S. relations in Shenzhen on April 17th, stated that Sino-U.S. relations are not clear to him here, or can be solved.
In theory, if the United States banned the sale of high-tech chips to China, then the patents involved in these chips would be ineffective in China. Then Chinese companies could directly use the United States' patented products. However, China's high-tech companies such as ZTE are all operating worldwide. Sales of products containing patented technologies from US companies in overseas markets are bound to encounter intellectual property lawsuits.
On April 17, the spokesperson of the Ministry of Commerce of the People's Republic of China stated in its statement that it will pay close attention to the progress of the situation and stand ready to take necessary measures to safeguard the legitimate rights and interests of Chinese enterprises.
Deutsche Bank issued a report saying that although it feels sympathy for ZTE's ban, it is also disappointed by its regulatory oversight and believes that the current verdict is not yet finalized. The final result has the opportunity to extend the negotiations to the United States and the Chinese government. The bank also said that it is still uncertain which parts of its products are imported from the United States and whether they can be replaced by domestic suppliers, so it is difficult to estimate the impact of the US sanctions on ZTE.
According to Deutsche Bank, even if ZTE can purchase from domestic suppliers, its ability to use the reconfigured products to provide services to customers may also be seriously affected. Given that certain chips and filters are purchased from the United States and are difficult to replace, it is expected that the company's wireless products will be the most affected.
The CICC report stated that the U.S. Department of Commerce imposes a prohibition on the export of ZTE. If it fails to reach a settlement within 1-2 months, it will affect the normal production and sales of communications equipment and mobile phones, as well as the current global and Chinese The operator's network construction will have a certain impact, and it may affect the promotion of future 5G networks. ZTE currently accounts for approximately 10% of the global telecom equipment market, and accounts for approximately 30% of the market share of China's telecom equipment market. ZTE has spare parts inventory for January-February. Failure to reach a settlement as soon as possible will affect related businesses.
China Merchants Electronics believes that the ZTE embargo has a greater impact on the communications industry, and it also sounds the alarm bell for the semiconductor industry. It is not only a slogan that it can be controlled independently, but also involves the national security, the national economy and the people's livelihood, and ldquo; We not only want to set up a long-distance record, but also to establish fabs with great fanfare, but we must also work hard to support our talents and support local chip design companies. ”