The US government launched an export ban on ZTE on the ground of breach of promise clause. ZTE was banned from buying US parts and software in the next seven years. According to foreign media analysis, this will not only bring great difficulties to ZTE, but also affect the global telecom industry supply chain.
According to Nikkei News, a ZTE insider was quoted as saying:
According to reports, the telecom parts purchased by ZTE can last for a month, but the production of the company has basically stopped.
In 2016, the US government accused ZTE against exporting products to Iran and other countries, and then fined $900 million. ZTE acknowledged some of the wrong practices and signed a settlement agreement. However, this time, the US government believed that ZTE did not comply with its commitments and punished its employees.
Foreign media pointed out that the sanctions imposed by the US government will also affect the global telecommunications industry.
ZTE is expanding its market share in the global smartphone market. Last year, the size of the smartphone was 43 million, ranking ninth in the world. 70% of ZTE's smartphones are used for exports, half of which are exported to the US market. According to statistics, in the US smartphone market, ZTE has a share of about 12%, ranking fourth.
The US sanctions against ZTE are due to its dependence on the US technology industry. In ZTE's smartphone, 30% of its components come from the US, and ZTE's important suppliers include Intel and Qualcomm.
Software is another problem. At present, almost all smart phones run two major operating systems, Apple's iOS or Google's Android, ZTE uses Google authorized Android. The seven year export ban means that ZTE may not be able to use Google authorized Android system.
It needs to be pointed out that Google provides free Android open source code outside. If Google's official Android is banned, ZTE will still be able to use the open source version of Android, but it will not be able to get the software that is very popular around the world, such as the Play store, and the user's indispensable software.
The sanctions will affect ZTE's expansion in the 5G network, and 5G is regarded as a growth point in the telecommunications industry. In February, ZTE just announced cooperation with Intel and Qualcomm in the field of 5G.
The Nikkei news pointed out that the influence of the ZTE ban will surpass China's scope, and the blockade and the Sino US trade war will damage a number of US companies.