This matter has caused extensive discussion in the Chinese media. It is generally believed that ZTE violated regulations and did not actually comply with the terms of the settlement agreement signed with the US Department of Commerce in 2017. It repeatedly bullied and misled the investigation work of the US Department of Commerce, resulting in the United States The cause of the Ministry of Commerce's pain killer.
On the other hand, in the ZTE internal documents obtained by the U.S. Department of Commerce, it clearly stated how Huawei exported its products to the countries that are listed on the embargoed countries, and can effectively escape the US check. This document believes that ZTE should refer to Huawei’s approach to correcting its operational procedures will reduce the risk of being seized by the United States. Since this document has been seized by the U.S. government, Huawei was also summoned by the U.S. Department of Commerce a few days ago. Will Huawei be able to withdraw completely, or What level of sanctions will be imposed on the U.S. Department of Commerce remains to be seen.
The ZTE Incident Has Become the Focus of China's Political Defense
According to ZTE’s previous financial report data and industry estimates, since the stock amount of ZTE is usually only slightly higher than the turnover of one quarter, the inventory of key components is probably between one and two months. Therefore, the ban of the US Department of Commerce is in force. After that, the company's production line may face a shutdown before the end of the second quarter, and will not be able to ship properly until the third quarter of 2018.
Although ZTE’s senior officials have already clarified that the company’s core chip is a dedicated chip designed by itself, there will be no shortage of goods, but considering that the communication system contains a large number of high-speed analog components, such as high-speed ADCs, low-noise amplifiers (LNA), and strings. The related technology of the serializer (SerDes) is basically in the hands of the international simulation giants, and the foundries on both sides of the Taiwan Straits have no ability to mass-produce such chips. Therefore, ZTE's high-level propaganda clearly only stabilizes the market's confidence.
In fact, half a month after the ban came into effect, ZTE’s production line has been completely shut down, indicating that ZTE’s inventory of spare parts is not as optimistic as expected. Therefore, ZTE’s top priority is to make every effort to make good efforts with the U.S. government in order to make a transition. Outside the space, getting the necessary components through other pipelines is also necessary to duck the water. However, whether the components obtained through these pipelines is enough to allow ZTE's production line to resume operation remains to be seen.
Taiwan’s Ministry of Economic Affairs recently announced that allowing Taiwan’s technology companies such as MediaTek to supply ZTE to China’s ZTE seems to be a timely rain, but in fact, most of the components that Taiwanese manufacturers can provide can only be used on ZTE’s mobile phones. The company's base station equipment, switches, routers and other telecommunications equipment products, many key components or have to be provided by the United States companies.
According to the US judicial and governmental system, ZTE wants to overturn the Ministry of Commerce’s injunction order through court proceedings. The possibility is that the reason why the Ministry of Commerce has implemented the injunction is that ZTE violated the terms of the settlement agreement signed by both parties in 2017, not ZTE illegally exported its products to North Korea and Iran for these old cases. Regardless of the reasons for appeals by ZTE, under the principle of respecting contracts and non-compliance, the US judicial system may not accept ZTE’s appeal, even if it accepts ZTE’s The odds are not great, and it is not an emergency.
ZTE's possible solution to the problem is twofold. One is to persuade the US Department of Commerce to open up one side, and the other is to seek President Trump's administrative order to amend the Ministry of Commerce's ruling or influence its implementation, but this will cause great political controversy. In a recent posting on Twitter, he stated that he will use administrative orders to help ZTE solve the problem and request the Ministry of Commerce to revise the ruling, but the US House of Representatives obviously does not agree with it, and the administrative system also has opposition.
On May 17, the two parties in the House of Representatives unanimously adopted the ZTE sanctions amendment, basically blocking President Trump’s use of administrative orders to help ZTE solve this route because the U.S. Congress can rely on legislation that contradicts executive orders, or The refusal to authorize appropriations for the implementation of executive orders overturns the executive order issued by the President. There have been few such cases in the past. The ZTE case is one of them. The U.S. president has the power to veto the decisions of the U.S. Congress. However, when the U.N. 2. When the majority opposes the president's executive order, the order can be overturned.
Apart from the Congress’ obstruction, there are many voices within the US administrative system regarding the relaxation of the ZTE sanctions. The White House’s economic advisor Larry Kudlow pointed out that even if the Sino-US trade war has temporarily ceased, the Chinese side should still not expect ZTE to follow suit. From the injunction order, US Treasury Secretary Steven Mnuchin also stated that the issue of ZTE is not just a trade issue. The U.S. government’s punishment of ZTE will not be easily modified.
Intellectual property rights protection is also one of the main battlefields of US-China trade disputes. Although both the United States and China have reached preliminary consensus in the bilateral trade negotiations held in Washington on May 20, the temporary suspension of trade-item penalties for exports to the other side will be suspended. Sex tariffs, but for the protection of intellectual property, the joint statement of both parties is full of vague political language. It can be said that there is no beef. It can be imagined that in the future, China and the United States will also oppose intellectual property protection issues, and the global high technology Trade will also continue to face uncertainty.
In fact, the US semiconductor companies that are at the heart of the storm are very cautious about reverting their supply to ZTE. An American semiconductor company stated that although Trump announced on Twitter that it would relax the ZTE sanctions, the company We still have to wait until the formal official documents of the US Department of Commerce are issued before we can act. Now, it seems that the U.S. Department of Commerce’s official documents may have to wait for a while.
The semiconductor industry has no curve overtaking
On the other hand, there were also many discussions on the review of China's semiconductor industry policy through the ZTE incident, because this incident once again revealed that the Chinese science and technology industry has a low degree of mastery of chips, process equipment, materials, and EDA tools. As long as the United States has a shot, The development of China's science and technology industry will face tremendous pressure and even be unsustainable. After this lesson, the Chinese government will inevitably step up its efforts in guiding capital to enter semiconductor-related industries, rather than letting capital be paid for in the take-away, sharing the innovation of business models such as bicycles. On top of that, business model innovations have done much more and have not helped build China’s core strengths in the semiconductor field. What's more, many start-up companies that focus on business model innovation in China are in fact unable to continue business.
On the other hand, the Chinese government should also realize that if you want to save money to develop semiconductors, your methods may be even more delicate, and you need to be more knowledgeable and choose the right person. In recent years, China has paid attention to In the development of the semiconductor industry, the central and local governments have prepared hundreds of billions of yuan worth of silver bullets. Such a large sum of money naturally attracts people from all walks of life. However, most of the principals who hold government subsidies do not want to use mergers and acquisitions. To acquire technology is to replicate the successful experience of using the market for technology since the reform and opening up. There are very few entrepreneurs who are willing to start from the lowest level and carry out technological research and development step by step.
The results are also very clear. With the Ziguang Group headed by the silver bombs, the mergers and acquisitions around the world are looking for mergers and acquisitions everywhere. This has led to a chaos in the industrial order. Governments have also started to warn China’s capital in the technology industry and become vigilant. They have often used politics. Means of intervention, making the use of mergers and acquisitions to achieve the effect of technology is not as expected.
Although it is feasible to use market-for-technologies, due to China’s inadequate protection of intellectual property, foreign companies are often required to have joint ventures with local companies. With only a few exceptions, they can set up companies solely in China. Therefore, there are always some foreign companies investing in China. Scrupulous.
In fact, the Chinese semiconductor industry has always had a model student, that is, Huawei. Although Huawei also faces the risk of being punished by the U.S. government, the company is still a respected and even respected company in the technology industry because they are A hard-ground technology company, many technologies are independent and independent research and development. Because of this, Huawei's road goes longer than most Chinese technology companies, but also farther. If one day, Huawei in order to achieve complete automation of equipment components The supply will expand the focus of the chip design team from digital SoCs to high-speed simulations, and even build 8mm fabs to produce the analog chips they need. This will become a genuine IDM, and the author will not be surprised. 2. It is difficult to find the second home in China.
Huawei’s semiconductor road has reached its 27th year. Today, the predecessor of Hess Semiconductor, Huawei’s integrated circuit design center, was established. TSMC was only four years old. Look at Huawei’s hard work in the semiconductor field and today’s Achievements, who said that the semiconductor industry has a tendency to overtake this thing? If China's semiconductor industry development policy maker learned something from the model of Huawei and implemented it, the Taiwan semiconductor industry is really in trouble.
Respond to the impact of Zhongxing Taiwan factory must strengthen internal control
ZTE has been banned by the US Department of Commerce, which has caused an uproar in the Chinese science and technology circle. However, Taiwanese tech companies seem to be only talking about chat. This is actually very dangerous. ZTE has not had a deep relationship with Taiwan’s semiconductor supply chain. The impact of MediaTek's day-to-day operations is not significant. Of course, this is one of the reasons. However, if Taiwan’s electronics industry thinks it is easy to stay out of the picture, it is wrong.
As mentioned in the previous article, after the US embargo, for ZTE, how to obtain the embargo necessary components through other channels and extend the normal operating time of the production line is the key to the survival of the company. Hong Kong was once China's important channel for acquiring Western electronic components. Today it is also of certain importance. In addition to Taiwan’s semiconductor component agents, Taiwan’s numerous electronics manufacturing bases in China are also equipped with a large number of electronic zeros. Component inventory, which of course is listed on the control list, cannot be provided to ZTE's items.
In fact, many of the chips controlled by the U.S. government are mostly provided by big manufacturers. For these more sensitive products, chip suppliers are not directly shipping to the foundry customers, they are either shipping to foundries, or only Handed over to large-scale agents with a certain scale or above. Small-scale agents, and even traders who run single-handedly, can hardly get these sensitive chips.
Therefore, if ZTE wants to obtain these chip components through the operation under the countertop, it will inevitably have to start from the foundry or a large-scale distributor to see whether or not it has used the relevant industry to audit the opportunity for internal control not to be delayed and to obtain outflow chips. This is the case. Taiwanese companies need to worry about the most.
In fact, the internal control of electronic foundries or distributors is not strict, and the outflow of important parts and components of customers' products is something that often happens. Otherwise, how can electronic stores in Shenzhen Huaqiangbei and even small advertisers on Facebook advertise? Selling the screens, circuit boards, housings and other components of major mobile phone brands. Insufficient inventory audits may not cause too much trouble in peacetime, but when ZTE is embargoed, it means that all companies must Tight nerve processing.
It is an indisputable fact that there are huge underground electronic supply chains for electronic components in China. Moreover, in this underground supply chain, there are not only counterfeit goods but also factory components. Some people in the industry have stated that in the past, there was a factory in mainland China. In the women's lavatory of the factory, it was found that the number of mobile phone application processors, casings and screens, showed that the company's production line employees are likely to collaborate with outsiders, ready to transport these components to the factory. Because this kind of behavior often occurs at the grassroots level or even on temporary workers, it is hard to prevent. However, if the outflow is concerned, the outflow caused by the middle-ranking officials collaborating with outsiders is the most impressive.
In this turbulent moment, for the foundry, the risk of outflow of parts is particularly not to be underestimated, because these key components have serial numbers on top of them, as well as production and transportation history, it is not difficult to trace them. Especially chips, even the encapsulation shell The logo on the system is obscured. With a little reverse engineering, the origin of the chip can be traced. In case these stolen chips pass through various channels, they are transferred to ZTE's production line and applied to the end product, which was discovered by the US Department of Commerce. Will cause all sorts of troubles to the related business. Not only the related personnel is difficult to explain to the chip original factory or the customer, also may investigate by the US Department of Commerce, fine.
All in all, ZTE has been embargoed by the US Department of Commerce, and its direct impact on Taiwan is relatively limited. However, if there is any problem with the internal management of the Taiwan factory, it may jeopardize the end of the typhoon. In this regard, Taiwan’s electronics industry should be vigilant and prevent it. Countermeasures.