This picture taken on May 3, 2018 shows the ZTE logo on an office building in Shanghai. The heated trade dispute between the U.S. and China has claimed its first victim, with China's ZTE crippled by trade tensions while reeling from repercussions that could cost the firm dearly in the long run. The Shenzhen-based telecommunications giant had halted all major operations after the Trump administration, citing violations of a recent sanction settlement, banned it from purchasing American components and services, which are vital to making smartphones and other telecom gears. Though things made a turn for the better on Monday, with President Trump tweeting that he is working to give ZTE "a way to back into business," the company has already suffered mounting losses. Some of its long-time customers are scaling back deals with ZTE, amid worries over whether it can guarantee supply.
San Diego-based chip maker Qualcomm Inc. QCOM 0.98% provides at least eight of 25 key components on the device's main circuit board, ABI said, making it the biggest supplier of those parts. They include the modem and the power-management unit, which directs the flow of electricity through the device. Other key components come from SanDisk Inc., a flash-memory supplier based in Milpitas, Calif., and Skyworks Solutions Inc., SWKS -1.22% a Woburn, Mass., chip maker, ABI said. The protective glass on the phone's display is supplied by Corning Inc., GLW -0.50% the maker of Gorilla Glass, which is also used in Apple Inc. devices. Corning is based in New York state.
U.S. and British officials struck separate blows at telecommunications-equipment giant ZTE Corp., ratcheting up national-security scrutiny of a big Chinese company amid broader economic tensions between Washington and Beijing. British cybersecurity officials warned U.K. phone carriers to stay clear of ZTE's equipment and services, citing concern about the potential that Beijing could force the company to help it infiltrate or sabotage telecoms infrastructure. The U.S. Commerce Department, separately, banned American companies from selling products to ZTE, saying the company violated the terms of a deal last year settling allegations of sanctions busting involving North Korea and Iran. A ZTE spokeswoman said in a statement that the company is aware of the Commerce Department action. ZTE is "assessing the full range of potential implications that this event has on the company and is communicating with relevant parties proactively in order to respond accordingly," she said.
BEIJING - While a Huawei executive faces possible U.S. charges over trade with Iran, the Chinese tech giant's ambition to be a leader in next-generation telecoms is colliding with security worries abroad. Australia and New Zealand have barred Huawei Technologies Ltd. as a supplier for fifth-generation networks. They joined the United States and Taiwan, which limit use of technology from the biggest global supplier of network switching gear. Last week, Japan's cybersecurity agency said Huawei and other vendors deemed risky will be off-limits for government purchases. None has released evidence of wrongdoing by Huawei, which denies it is a risk and has operated a laboratory with Britain's government since 2010 to conduct security examinations of its products.
ZTE said Wednesday it had halted major operations, though employees at its headquarters in Shenzhen showed up to work as usual Thursday. As hundreds of workers streamed in and out of a nearby cafeteria during lunchtime, some said they had little to do since production was shut down in late April. Others said they were working as usual. Concerns about ZTE's ability to ship smartphones, routers and other telecoms gear have heightened after the company's announcement, which didn't specify which operations were most affected. The telecom firm had warned for weeks that it was battling to survive a Commerce Department order barring American companies from selling to ZTE as punishment for its violation of a 2017 settlement to resolve its breach of U.S. sanctions against Iran and North Korea.