It was reported earlier in the week that ZTE had been banned from purchasing components from firms in the United States. The ruling came from the U.S. Department of Commerce after it found that the firm failed to discipline its employees that were involved in an incident from the previous year regarding its actions of subverting U.S. sanctions in Iran. As you can probably imagine, for a company that relies heavily on processors from U.S. based Qualcomm, this is a huge hit, but it looks like China is looking for a way to avoid catastrophe.
According to Reuters, China is in the process of upping its production in the semiconductor market. The outlet reports that "Senior Chinese officials have held meetings this week with industry bodies, regulators and the country’s powerful chip fund about speeding up already aggressive plans for the sector." While all eyes are on ZTE at the moment, if more widespread bans arrive for China, that would mean that other companies or even the country itself would not be able to make use of brands like Qualcomm, Intel, Microsoft, and more.
China isn"t completely barren when it comes to chip manufacturers and the country does have a goal to have domestic chips to be inside 40 percent of its smartphones by 2025. While the new ban is limited to ZTE at this point, this countermove by China could stir the pot a bit more when it comes to its relations with the U.S.
Source: Reuters