US’s ZTE ban backfires

Great-Depression-Unemployment-Line-It seems that the US’s daft ban on ZTE gear is doing more harm to its home-grown businesses which are suffering more.

The U.S. Commerce Department decided to punish ZTE for selling coms gear to the Iranians years ago and issued an export ban on the outfit. However that seems to be punishing a lot of US companies who depend on ZTE’s components or business.

Jose optical-parts maker Oclaro saw its shares plummet because it sells multiple products to ZTE, a maker of mobile devices and telecoms systems.

Chipmaker Integrated Device Technology said the Commerce Department’s ruling “could cause changes to revenue trends” in its quarter ending July 3 its shares fell 1 percent.

Among other suppliers whose shares fell were Lumentum, down 3.3 percent; NeoPhotonics Corp, down 8.6 percent; Fabrinet, down 5.3 percent; Finisar Corp, down 7.7 percent; Inphi Corp, down 7.3 percent; and Skyworks Solutions Inc, down 4.1 percent.
ZTE distributor Avenet fell 1.5 percent.

Qualcomm slid 1.58 percent while its rival MediaTek Inc rose three percent. Any switch by ZTE to replace Qualcomm as a supplier might take several months, because of the need to work out need specifications.

However the worse it yet to come. The worst fallout for US suppliers around ZTE’s telecommunications-infrastructure equipment rather than its handset business.

Still while the US tech industry suffers, at least they can be re-assured that by stuffing themselves up they will be punishing that naughty Chinese telco for breaking a US embargo when the Americans hated the Chinese.