ZTE founder Hou Weigui mountain fire ban on a piece of paper for both sides, and ultimately to reconciliation? Can the next sanctioned or chip foundry enterprise speed up the domestic core progress bar? Source: Southern Metropolis Daily A photo of Hou Weigui, the founder of ZTE, has recently taken a picture of friends from the mountains for sanctions. The photos provided by ZTE insiders to the southern journalists can be seen at Shenzhen airport. In 2016, the retired Hou Weigui, now 76, walked on the front, followed by ZTE chairman Yin Yimin. And CEO Zhao Xianming. In April 16th, the US Department of Commerce activated a refusal order against the company. The company set up a crisis response working group for the first time. Every field is analyzing and formulating measures to go all out and face the crisis, ZTE announced to all employees, the company is actively communicating and making the best efforts to promote the solution of the crisis. In April 16, 2018, the US Department of Commerce issued an order prohibiting US companies from selling components to ZTE for 7 years. In April 19th and 18th, ZTE issued a announcement that the first quarter report will be postponed in 2018 and the suspension will continue because the US Department of commerce is still required to make an assessment of the order of the US Commerce Department. ZTE is currently the most undervalued has been adjusted to 25.03 yuan / share, equivalent to the daily limit of two. However, the share price of ZTEs US suppliers fell to varying degrees after the rejection order was issued. A ban. It is understood that ZTEs legal department is still conducting a tight translation and demonstration work against the US ban, and no specific measures have yet been released before the press release. The summit of the Ministry of Commerce, China, said at a press conference yesterday that the US side has caused widespread concern in the market for the United States trade and investment environment. The US sides behavior is on the surface of China, but ultimately it hurts the United States itself, which will not only lose tens of thousands of jobs, but also affect hundreds of American related companies. It is understood that ZTE has invested $14 billion in American chips and American equipment in recent years, and has created 20000 jobs directly and indirectly for the US market. AcaciaCommunications, the U. S. optical interconnection supplier, fell 35.97%. It provided high-speed fiber transmission equipment for data center, subway, long-distance telecommunications network and other applications. 30% of its revenue came from Zhongxing; laser equipment dealer Oclaro fell 15.18%, ZTE accounted for about 18% of its revenue, and Lumentum, Finisar, Neophotonics and so on. Optical communications related components suppliers also showed varying degrees of decline. Income growth in the Asia Pacific region, especially in China, has become the main driving force for the growth of American optical devices in recent years, the financial and securities research report pointed out that the acceleration of domestic 5G construction will further increase the contribution to the performance of us suppliers, if the US embargo on the sale and upgrading, Will suffer. Li Guanyu, chairman of red elephant investment, said that the loss of ZTEs communication could not be estimated. It would also bring impact on other technology enterprises. The high-tech industry is a global division of labor, and the whole industry chain will be affected by the intermediate link. If the imported chip is curbed, it means turning off the water source from the source. Fan Dizhao, the director general of the investment executive director, said that if the US ban on ZTEs ban further spread and the impact on all high-tech enterprises in the country, the core chips of most high-tech companies were mainly dependent on imports, and the proportion of the United States was quite high. Especially in industries with high chip dependence, communication and security are at least emotional. Who is the next subject to be sanctioned? In fact, the US sanctions against Chinas chip sector are not the first. As early as 2015, the United States asked Intel to ban the sale of chips to the four supercomputing centers in China, and the ZTE event will not be the last. The research and prediction of Sai Di think tank, an authoritative research institution directly under the Ministry of industry and commerce, predicts that the next generation of integrated circuit OEM enterprises will be the next target. On the one hand, on the one hand, consumer electronics, industrial control, the automobile industry and other fields, the United States, Germany, Japan tripartite, once the sanctions for Chinese manufacturers can quickly find alternative solutions, and semiconductor equipment is still a dominant position in the United States. Liu Quan, director of sadi Network Security Institute, told reporters in Nandu that most of the key equipment of the industry was purchased from foreign countries. If the technical support was limited, the impact was fatal. Of course, for Chinese manufacturers, this ZTE event is also a wake-up call, and it should not commit a low-level error in the legal boundaries. The report said: China should strengthen compliance review and product safety assessment for domestic enterprises; on the other hand, strengthen risk management, especially the research on the national level industrial macro strategy, and understand the strategic intentions of the United States. Of course, many analysts believe that the lose lose situation will not last too long. ZTE can not operate continuously, suppliers will certainly be affected, and will have a great impact. ZTE is a system integration. Now the core components of the system are not supplied, and the whole set of equipment can not be sold. In the long run, it will have an impact on the 5G process. Analyst Wang Qing told the media that the role of the government in promoting the 5G process is obvious. But such a big investment can not afford to foreign operators and equipment companies, so they are trying to speed up 5G research and development on the one hand; on the one hand, the Chinese enterprises are restricted by the original accumulation of the basic and physical layers, especially the accumulation of patents. In the long run, neither noxi nor Ericsson will benefit from the incident. He judged that (ZTE) had great room for buffering. Ban will slow down the process of building 5G On the trend of the ZTE, the national gold Securities report pointed out that ZTE had a stock of spare parts for about 2 months, and the U. S. commerce departments ban on ZTEs authority would have a certain impact on ZTEs communications equipment and mobile phone business if it failed to reach a reconciliation within 1-2 months. Nandu reporter learned that, in terms of mobile phones, high Qualcomm is currently one of the largest source of application processors in ZTE, accounting for about 6 of its mobile phone products. The United States is ranked second, close to 3, while the main memory suppliers are mainly Korean businessmen, Samsung and hex. In communication equipment, the construction of 5G for the next generation of the next generation mobile communications technology will be affected, the US refusal order will slow down the 5G process on the one hand and the US suppliers will be affected on the other, Yang Peifang, the Secretary General of the Ministry of telecommunications economic experts, told the southern reporters. ZTE reported that in September 2017, the second phase of Chinas 5G technology research and development test was completed in all the second stages of the test; the first industry to launch MassiveMIMO commercial products, open the 5G technology 4G, Pre-5G continues to be commercial, more than 110 Pre-5G networks have been deployed in more than 60 countries in the world. This means that if the ban came into force, will certainly affect the construction of global 5G network. Zhongxing communications about 25% to 30% of the components are supplied by headquarters in the United States, ZTE needs high-speed ADC/DAC, 3DMIMO chips, modulators, high-performance phase locked loops, intermediate frequency VGA and other products. At present, no domestic chip manufacturers can provide alternatives, said Tang Chuan, an analyst at the national gold certificate, if the embargo is prohibited. The implementation will be both of China and the United States. We believe that the possibility of the US sides bargaining chips as a bargaining chip is enormous. Based on similar historical cases, it will finally move towards reconciliation under the intervention of the two governments. For the development of the situation, Xiang Ligang said to the Nandu reporter: the next business department and the United States Department of Commerce to talk, it is certainly not the US government to punish the ZTE, the last 890 million dollar fines is the Ministry of Commerce to talk, this negotiation must be a part of the whole trade dispute. The spokesman of the Ministry of Commerce stressed that the United States should not underestimate Chinas determination. He said that if the United States wants to curb Chinas development through unilateralism and trade protectionist trade policies, force China to make concessions that is the wrong abacus. Domestic chips have a long way to go A good place is the equivalent of a popular science, and everyone realizes that this science and technology is the most important part, but because the chip is not a slogan, it can be done. It involves the economic and standardization of the industrial chain, and the application of domestic brands, even if we can produce chips and produce it. The machine of the chip is also imported. So from the angle of chip is the case, we are forced to death, did not return it. For this event to promote the localization of chips, economic commentator Ye Tan told Nandu reporters, in the long term, there is no so-called bend overtaking possibility. The so-called gap is basically impossible to say because you cant do it at all. Chip technology design is a technical gap of several decades. According to the statistics of the American Semiconductor Industry Association (SIA), the whole Chinese market is about $100 billion in sales per year (less than 10% of Chinas self-sufficiency rate), of which the share of American companies is close to 60%, and the amount of American companies exports to China is over $50 billion. In fact, not only ZTE, the chip is a high - investment, long - cycle high - point industry, the need for time precipitation and accumulation, at present, the domestic chip is still a long way to go. Knowing that there is a popular science post, the core international has finally produced a 28 nanometer process chip this year, but it was done 7 years ago. Next year, it was ready to produce 7 nanometers; the key equipment lithography of the production chip, ASML has entered 13 nanometers, but China is still unable to produce 193 nanometers. According to communications experts to Li Gang, the chip localization government has long been laid out, more than ten years ago, the CPU of computers has been started, but it has not been done yet. Or because of the lack of determination, the first CPU to do is not to invest enough money, and mainly by universities and research institutions to do, it is not possible to do it. In addition, like the display news, HUAWEIs Hass, can also get the support of the government, but the support is not equal, and is not enough, there is in some areas must have what kind of chip, no government and no demand. However, the biggest advantage of domestic chip is in the Chinese market. From the Chinese mobile phone market, more than 60% are homemade mobile phones. This big market can make up a few domestic chips. For example, like a chip in South Korea, only a few companies are using it. There are many enterprises in China. This is our biggest advantage and biggest opportunity. Ye Tan told the Nandu reporter, in the medium and long term, I feel good to keep, and second I think we need to establish a culture of intellectual property innovation, innovation results, you should be able to protect. In fact, our economic industry chain is not enough, we use domestic product awareness is relatively low, we can provide a certain amount of subsidies for innovative enterprises and the enterprises used. This article source: Southern Metropolis Daily editor: Hou Weicheng _NT4124 However, the biggest advantage of domestic chip is in the Chinese market. From the Chinese mobile phone market, more than 60% are homemade mobile phones. This big market can make up a few domestic chips. For example, like a chip in South Korea, only a few companies are using it. There are many enterprises in China. This is our biggest advantage and biggest opportunity. Ye Tan told the Nandu reporter, in the medium and long term, I feel good to keep, and second I think we need to establish a culture of intellectual property innovation, innovation results, you should be able to protect. In fact, our economic industry chain is not enough, we use domestic product awareness is relatively low, we can provide a certain amount of subsidies for innovative enterprises and the enterprises used.