ZTE Ban Weighs on Electronics Supply Chain
ZTE Corp. was the primary target but a decision by the U.S. Department of Commerce restricting the sale of electronics components to the Chinese telecommunications equipment manufacturer is reverberating throughout the industry.
Executives at component suppliers, distributors and OEMs said they are monitoring the situation and have implemented further supply chain vetting actions to avoid getting sucked into the unfolding saga.Many suppliers to ZTE are believed to have suspended sales to the company until the issues it has with the Dept. of Commerce have been cleared up. Rather than apply for an export license to ship American-designed components and equipment to ZTE the suppliers are simply curbing or halting most transactions with the company until further notice, according to Industry observers speaking on condition of anonymity due to the delicate nature of the situation.Sources said they believe the U.S. government is unlikely to approve any applications for export licenses involving ZTE or any of its affiliates. In many cases, some companies are even extending the cautionary approach to other Chinese high-tech companies, especially those involved in the production of electronic equipment that require components having dual-use potentials, they said.