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ZTE: The Sacrifice of the Great Power Game

via:博客园     time:2018/4/17 17:02:06     readed:482


Wen/Gu Quanjun

Yesterday, the Sino-US trade war reached an unprecedented level of tension. Killing people, the United States’ ban on papers, let ZTE, which was already flying and storming, suffer another heavy blow.

What's the penalty?

On April 16, U.S. Secretary of Commerce Wilbur Ross announced that because the Chinese telecommunications equipment supplier ZTE did not fulfill some of the agreements in the settlement agreement, the US Department of Commerce will prohibit US companies from selling components to ZTE. The time may be as long as 7 years. . At the same time, the UK National Cyber ​​Security Center also issued the latest recommendations to warn the telecommunications industry not to use ZTE's equipment and services.

In addition, the U.S. Department of Commerce’s Bureau of Industry and Security also fined ZTE for a sum of US$300 million. This part of the penalty can be suspended, mainly depending on the implementation of the agreement in the next 7 years.

In short, within 7 years, ZTE can no longer use any parts and technology from the United States to produce products.

"This actually excludes them from activities involving the United States and any American items, whether pencils or routers." "The British Financial Times quoted a former U.S. official familiar with the case as saying.

The reason is?

There are too many US penalties for Huawei and ZTE, and the specifics of this storm should be discussed from last year.

On March 7, 2017, ZTE reached a settlement on the US government's export control investigation case. The cause of the case was ZTE USA’s sale of contraband products to Iran, a country sanctioned by the United States. ZTE acknowledged three allegations: without permission from the U.S. government Exporting U.S. products to Iran impeded the administration of justice and created major misrepresentations.

At the same time, ZTE’s total penalty amounted to US$1.192 billion, a total of approximately RMB 8.22 billion. In addition to paying the money, ZTE has also made disciplinary sanctions, including but not limited to personnel measures such as layoffs and fines.

However, according to foreign media reports, the U.S. Department of Commerce issued a statement on Monday that ZTE made false statements to the Bureau of Industrial Security of the Ministry of Commerce from 2016 to 2017. ZTE did not disclose truthfully that it had paid all employees who had committed illegal acts. Bonuses, and no condemnation letter was issued to them.

ZTE Corporation promised to dismiss 4 senior employees and punish 35 employees by reducing bonuses or penalties. However, ZTE admitted in March this year that the company only dismissed 4 senior employees and did not penalize or reduce the bonus of 35 employees.

ZTE misled the Ministry of Commerce. ZTE did not condemn (employment) employees and executives but instead rewarded them. This shocking behavior cannot be ignored. "The US Secretary of Commerce Wilbur · Rose said in a statement."

From the perspective of the United States, it is: I have punished you once. You do not know how to repent and you intensify. OK, then I'll do it thoroughly.

As a result, there have been such tough and incredible sanctions.

Impact on ZTE geometry?

In short, if the ban is really implemented and it will last for seven years, it will be a devastating blow to ZTE.

Last year’s US$1.192 billion fine imposed ZTE’s vigor. From 2010 to 2016, ZTE’s total profits amounted to only 7.315 billion yuan. This paper’s fine was so expensive that ZTE’s efforts for several years went sour. Today's sanctions are not only as simple as fines, but ZTE even has the danger of stopping production.

Let's first take a look at the main business of ZTE currently: ZTE currently consists of two major mobile phone, tablet and other consumer electronics products as well as telecommunications equipment, of which telecommunications equipment accounts for about 60% of revenue and related services, while consumer electronics products Only about 30%.

In today's fierce market competition, not to mention 7 years, that is, 7 months may have a fatal blow to a company. The reason is also very simple. Today's smart phone manufacturing relies entirely on the "world factory", and the United States can provide processors, tuners, glass and other parts, and will not be able to find alternatives in other countries at one and a half.

Qualcomm's processor is definitely not there, and other components that depend on the United States are also in the game. Since the Android system is open source, it can be basically used casually. However, now that ZTE has not obtained Google's GMS authorization (which can be understood as Google's family bucket), it is not a small obstacle to entering the international market. Especially when overseas sales account for up to 70%.

On the telecommunications equipment side, according to all-weather technology reports, ZTE’s key components of the telecom equipment sector, such as transmitters and receivers for optical transmission, are still supplied by major international manufacturers as the main source of parts, and parts in telecom equipment are also not available. Less suppliers from the United States. Overall, foreign parts accounted for at least 60% of their material parts, while materials from US suppliers accounted for at least half of the 60%.

With cold teeth, ZTE's production is threatened, and even with it will also affect a group of Chinese suppliers.

Mastering the "Core Technology" of the United States, can be a similar blow to Chinese manufacturers to implement a similar blow, because "No Core" has been the inseparable pain of the Chinese semiconductor industry.

This is like the “technological blockade” of Tezuka’s technology in the “Three-Body,” if it is hard to find some comfort, it will stimulate the development of China’s semiconductor industry and may even rise to “two bombs and one star”. The height of the power of the whole country.

But in any case, ZTE has already fallen victim to the big game.

Follow-up response and impact

On the morning of April 17, the US Department of Commerce announced that it would ban US companies from selling components, goods, software and technology to ZTE for 7 years. The spokesman of the Ministry of Commerce stated:

The Chinese side noticed that the U.S. Department of Commerce announced measures for export control to ZTE Corporation. China has always required Chinese enterprises to abide by the laws and policies of the host country in the course of overseas operations and conduct operations legally and compliantly. ZTE Corporation has conducted extensive trade and investment cooperation with hundreds of U.S. companies and contributed tens of thousands of jobs to the United States. It is hoped that the United States will properly handle the matter in accordance with regulations and create a fair, equitable and stable legal and policy environment for the enterprise. The Ministry of Commerce 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 companies.

ZTE Corporation issued a statement in the official website and said 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.

This morning, affected by the incident, ZTE's AH shares were both suspended. The reason is to issue an inside information announcement about the US Department of Commerce’s Bureau of Industry and Security's activation of the refusal order. The company will resume trading after the relevant announcement is published.

According to Sina Technology, as of the close of the US stock market on April 16, Qualcomm fell 1.72% and Micron fell 1.11%. At the same time, American fiber optic network provider ACIA tumbled 35.97%, Oclaro fell 15.18%; in addition, A shares of many technology sectors The stock price of the company declined, and the stock price of Hikvision and Dahua shares hit a daily limit.

ZTE is just a target. Above the battlefield, everyone is in danger.

"This is not a business problem. It is a problem of survival."

Also yesterday, the U.S. government stated that it is studying how to impose trade sanctions on China's cloud computing and other technology fields. Under pressure from many parties, the trade war initiated by the United States has not eased but has become increasingly fierce. In a slightly mundane word, "this is a war without gun smoke."

Investor “ Tang Shizhuan Sima Qian & rdquo; wrote on Weibo:

The ZTE's ban on sales is not just for ZTE.

The chip is China's highest dependence on the United States and the largest trade volume. To single out one for comprehensive ban sales is to threaten “ it can also completely ban other companies from selling. This practice is no longer a trade war mentality, but a Cold War mentality. Because in the country-to-nation trade system, buying and selling are only price issues in normal relations between the two countries. Comprehensive bans are hostile country relations.

IC is too late to start, and if it starts after 2008, it will not be so passive now. Regardless of how the crisis resolves, integrated circuit technology will also be upgraded to the height of the "two bombs and one star project" after the founding of the People's Republic of China. . This is not a business issue. It is a matter of survival.

Perhaps a new round of the Cold War is about to begin.

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