The US Department of Commerce issued a statement on Monday saying that because ZTE violated the settlement agreement reached with the U.S. government last year, it will implement a seven-year export ban on the company. This means that U.S. companies will not be able to provide products to ZTE in the next seven years.
As an American company, Qualcomm's business will be seriously affected by the ban, because a large part of ZTE's smartphones use Qualcomm's chip products. Research company IHS Markit data shows that last year's smart phone shipments were 46.4 million.
Neil Shah, research director of Counterpoint Research, another research firm, said: “Every year, ZTE sells about 45 million smartphones worldwide, nearly half of which use Qualcomm chips. The average price is $25 per chip. That's about $500 million in revenue. '
The scientific consulting service company Canalys even believes that 65% of ZTE's mobile phones use Qualcomm chips.
In addition, for Qualcomm, this business loss may be just a beginning. Due to the current tight trade relations between China and the United States, Qualcomm may also become an important goal of the trade war between the two countries in the future.
According to the report, the ZTE issue will bring three threats to Qualcomm: First, it will lose an important customer; Second, it will give competitors the opportunity to supply chips for ZTE; In addition, Qualcomm will be an important target as the Chinese government will counter the United States. .
The Ministry of Commerce of China has said today that it 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.
In fact, the tight trade relations between China and China have already caused Qualcomm to suffer. Reuters quoted sources as saying yesterday that with the escalation of trade frictions between China and the United States, China is slowing its review of Qualcomm’s acquisition of NXP Semiconductors.
However, as the previous application deadline had expired, Qualcomm had to withdraw its previous application and plan to submit a new application to the Ministry of Commerce of China. People familiar with the matter said that the postponement of the audit may have caused Qualcomm to abandon its $44 billion acquisition of NXP Semiconductors. And outsiders generally believe that this transaction is very important for the future of Qualcomm.
According to Shahab, the research director of Counterpoint Research, ZTE can purchase Samsung, TSMC or Spreadtrum’s chip products after not using Qualcomm’s chips. Huawei today reiterated that it will not sell its unicorn processors to external companies.