(Update: Sanctions lifting) US Gov to impose component restrictions on ZTE

by: Robert TriggsMarch 21, 2016


Update March 21st: After issuing trade sanctions on Chinese telecoms and smartphone supplier ZTE earlier in the month, the US government is planning to temporarily lift the restrictions to ease tensions between the two countries.

Apparently, the sanctions will be eased following “constructive” discussions between ZTE and the government, but will only last so long as ZTE abides by new commitments made to the US government. The exact details about the agreement have not be disclosed yet, but should be revealed once they are published in the Federal Register later this week.

“As part of the effort to resolve the matter, and based upon binding commitments that ZTE has made to the U.S. government, Commerce expects this week to be able to provide temporary relief from some licensing requirements,” – senior Commerce official.

For ZTE, the lifting of restrictions will ease pressure on the company’s base station and smartphone businesses, after the company postponed the release of its 2015 earnings and saw its shares suspended from trading on March 7th. Furthermore, US component suppliers will no doubt be keen to continue their business with ZTE as soon as possible.

ZTE is about to have a much harder time doing business in the USA, as the government is apparently planning to restrict local companies from selling hardware components and software to the Chinese telecoms giant.

The issue is reportedly to do with plans made by ZTE to re-export US technology products from its suppliers to Iran, which the US government prohibits. Allegedly, the US Commerce Department has seen ZTE company documents which revealed that company planned to use shell businesses to resell the supplies.

As a result, the government will be restricting US suppliers from selling any hardware or software components to ZTE. The ruling is expected to go into force on Tuesday. This will likely have major knock on effects for ZTE’s business in the US and around the world. The company is a major global supplier of telecom networking equipment and is the only Chinese smartphone brand with a notable presence in the US. At the last check, ZTE held around 7 percent of the US smartphone market, making it the fourth largest manufacturer in the country.

For the company’s smartphone business, this ruling would lock ZTE out of using components such as the processors designed by US giants Qualcomm and Intel. This is likely to cause major stock issues for some of the company’s higher-end products, and will likely result in ZTE purchasing alternative chips from rival processor developers, such as MediaTek.

Fortunately for ZTE, the company has not been banned from selling any products in the US. However, these restrictions will almost certainly have a major impact on the company’s growth plans, as many Chinese companies are still heavily reliant on US tech imports to build other products. ZTE shares were suspended from trading in Hong Kong earlier today upon announcement of the news.

  • Death to America and Butter Sauce

  • Boonlumsion Piyapon

    samsung will like this news. exynos will finally sale.

    • balcobomber25

      This will have little impact on Exnyos.

      • Boonlumsion Piyapon

        little ?

        zte is multi-nation company have 7% smartphone sale in usa and also sale everywhere arrow the world.

        when us rule this zte can’t buy any cpu form Qualcomm,Intel … only option on high end is Samsung Exynos.

        • balcobomber25

          Nope. You are forgetting about the second biggest supplier of phone SoC’s and a company most Chinese phones use: Mediatek.

          Exnyos isn’t a mainstream SoC. They don’t produce enough for Samsung’s own phones never mind supplying ZTE.

          • Boonlumsion Piyapon

            No. today qualcomm cpu make by Samsung.

            Basicly Samsung decide to used Exnyos in all of S6 phone. resute in Qualcomm’s stocks fall. After some time Qualcomm make a deal with Samsung to used snapdragon again in exchange qualcomm cpu will make by Samsung. inplace of TSMC.

          • balcobomber25

            Samsung is manufacturing the SD820 but they don’t manufacture enough Exnyos chips to supply ZTE with. The S7 is using both SD820 and Exnyos. The only reason the S6 used just Exnyos is because the SD810 was overheating otherwise they would have used that. Samsung makes some excellent chips but they are a specialty chip that appear in very few non Samsung phones. ZTE will look to Mediatek to fill it’s needs.

          • The Ultra

            I hope not.

            Mediatek is just mid-range. I posted this here before but the Helio X20 and X25 are at the level of a Snapdragon 650 / 652.

            (To be more detailed, the graphic of the X20 / 20 has only 1/3 of the cores of the Exynos 8890)

          • balcobomber25

            If you need the best graphics (which most people don’t) SnapDragon or Nvida is the way to go. For the majority of people though the X20 and X25 are more than powerful enough for their daily use.

          • The Ultra

            The thing is, if you don’t need the Graphic Power then why go for a Deca-Core, it just eats up battery (oh yes it does).

            The thing is:
            -If you want high end you wont get the mid-ranger X20 / X25.
            -If you want daily use plus battery life time: you wont get the X20 / X25.

            So what is the Helio X20 / X25 then: It’s all about marketing, it’s a big number written on paper.

            I am confident that some will fall for the “Deca”, but for daily use scenarios it’s useless. There are better options around. (MTK itself gives better options, and so does Qualcomm, Kirin)

            To be more clear:

            it’s like getting a PC with an Intel Xeon CPU with 14-Cores and pair it with a nVidia Gtx 950. It’s just not right.
            If you want high-end you go all the way.
            If you go for budget then you don’t do weird stuff and get something you have no use for.

          • balcobomber25

            Processing and Graphics are too completely separate things. Unless you play the most powerful graphically demanding games on Android on max settings you don’t need a high end GPU. But there are plenty of apps that take advantage of the extra processing power. Not to mention there is more in play than just performance with a SoC. There is audio, cameras, network performance etc. And the amount of cores doesn’t equate to performance, there are budget octacore chips that are slower than midrange quadcore chips. As for battery time the extra cores can actually help with efficiency not hurt it but like the performance it all depends how it is set up.

          • The Ultra

            Are you stupid? Wtf you do?

            Read again.

            The point is 10-Core SoC –> Useless for daily use! (Nobody needs it for daily use, has more disadvantages.)

            But you could need 10-Cores if you play a game, but well! The GPU is a fail so there the X20/X25 is useless.

            SO once again, so that you idiot may understand it now.

            10-Cores useless for normal users.
            10 Core with weak-GPU useless for gamers.

          • balcobomber25

            Are you stupid? Wtf “do” you do?

            You are showing with each post how little you know about processors and cores.

          • The Ultra


            MTK makes a SoC that has a great CPU, what’s useless for daily use and pairs it with a weak GPU, what’s useless for games.

            And sells it for the same price as a SD 650, or more expensive. (Though the X20 is about the same level as a SD 650)

            But I don’t understand SoC n stuff. Okay, as I said earlier, you are stupid. Wasted time to talk with you.

          • balcobomber25

            Let me correct that for you:

            “MTK makes a SoC that is excellent for everyday use and has a GPU that will handle the majority of the games in the Play Store with ease. And it sells for less than the SD650 (I like how you said “or more expensive” showing how you have no clue what SoC’s sell for). And yes you don’t understand SoC’s. Keep posting and you keep proving my statement correct.

          • The Ultra

            The Xiaomi Redmi Note 3 has a SD 650 inside and ships for a price of ~200$.

            That’s very competitive. (I did not write “or more expensive” out of the black.)

            The Helio X20 / X25 phones will sell more expensive, but offer less.

            And as said before, the CPU is useless by the means of:
            -Apps won’t be optimized to take use of the 10 cores (the majority of phones are 2,4,6,8 cores)
            -The combination of strong-CPU + weak-GPU makes it useless for games
            -The 10 core will eat up a battery much faster than a modern 4 or 8 core.
            – Heading is harder to manage on a 10 core.

            I have repeated myself too many times, this it it.

            All in all as said before, you are an idiot. I think you talk just to talk, and you don’t care what you say, as long it’s something.

          • balcobomber25

            The price of a phone tells you nothing about the price of a SoC. Xiaomi is the worst example to use, they sell everything at near cost. Again you know NOTHING about how SoC’s work, you embarrass yourself with each new post.

            – Android apps scale their usage based on the cores available, they aren’t designed to specifically run on 2 or 4 or 8 cores.
            – There’s very few games that you won’t be able to run on the X20, the X10 runs nearly every game available. For most people it will never be an issue, only those that play the most graphically demanding games will need something more powerful.
            – In Mediatek’s own tests the X20 has 40% better battery life than the companies own X10 (octacore). The number of cores means very little for performance or battery efficiency, the type of cores is much more important. There are dual core chips that are more powerful and more battery hungry than octacore chips.

            You can repeat yourself a million times you will still be wrong and have little clue what you talk about. I can repeatedly say that the Sky is orange, it wont make it right.

  • sithishs

    So I’m curious as to what smartphone components are actually STILL manufactured in the US…

  • Anon

    free market my ass. hypocrites

  • Wolvie

    Then ZTE should make a strict contract agreement with US government that they will not sell to those banned country like Iran.

    Btw i don’t have any personal hatred to those banned countries by USA. We all born as human with the same exact right as human being anywhere regardless what race, religion, gender, age, etc. It is because of certain bad peoples that manipulates others (read : brainwash) to do their bad things. You think those terrorist leaders willing to do suicide bombing ????

  • carol argo (- = +)

    I don’t sweat it for zte , I got a mediatek (28nm) in my Alcatel onetouch pop Astro and it is marvelous, I am pretty sure mediatek can now cover zte need , ilnow if zte can. Find a bit better screen and firmware for screen , they. Shouldn’t have issue in USA , sweet spot in USA is iPhone so adopt that on the inexpensive and it will selk

    • The Ultra

      Mtk is good and cheap.

      But the company doesn’t make High End SoCs. The Helio X20 / X25 is at the level of a Snapdragon 650 / 652.
      So if ZTE isn’t allowed to sell Qualcomm SoCs, their high end line is in big trouble.