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Market Research Report

The Impact of China-US Trade Fight and Huawei and ZTE Bans on the Global Communications Equipment Supply Chain

Published by MIC - Market Intelligence & Consulting Institute Product code 906603
Published Content info 64 Pages
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The Impact of China-US Trade Fight and Huawei and ZTE Bans on the Global Communications Equipment Supply Chain
Published: August 15, 2019 Content info: 64 Pages
Description

To keep his campaign promise, Trump signed an executive memorandum to impose higher tariffs on Chinese goods imported into the United States in March 2018, involving large amounts and plenty of goods. In the first two rounds of tariffs, the US has imposed duties on a total of US$50 billion worth of Chinese goods, including semiconductor Ics, car parts, machinery, and equipment, including servers. And smartphones are likely to be on the list. The U.S. Department of Commerce imposed a denial order against ZTE on April 16, 2018, banning American businesses or individuals from selling high-tech components and technologies to the Chinese telecom equipment maker. Despite the ban has been expanded to Huawei, the G20 Summit seems to help ratchet down the trade fight between the US and China. This report provides a description of how this all began, a whole picture of these bans and tariffs, and how these have affected the global IT industry, especially in the communications sector; looks at some of the possible consequences if the fight continues.

Table of Contents
Product Code: MCRPT19081501

Table of Contents

1. Preface

  • 1.1. Background
  • 1.2. Scope of Impact
    • 1.1.1. IT and Telecom Industries
    • 1.1.2. Brands and OEM/ODMs Export Goods from China to the United States

2. Taiwanese Communications Products Manufacturered in China

  • 2.1. Smartphone Industry
    • 2.2.1. Production Value
    • 2.2.2. Major Clients
  • 2.3. Wireless Broadband Equipment Industry
    • 2.3.1. Production Value
    • 2.3.2. Major Clients
  • 2.4. Fixed Broadband Equipment Industry
    • 2.4.1. Production Value
    • 2.4.2. Major Clients

3. The Possible Impact on the Industry

  • 3.1. Smartphone Industry
    • 3.1.1. Export Value
    • 3.1.2. Stakeholder Analysis
  • 3.2. Wireless Broadband Equipment Industry
    • 3.2.1. Export Value
    • 3.2.2. Stakeholder Analysis
  • 3.3. Fixed Broadband Equipment Industry
    • 3.3.1. Export Value
    • 3.3.2. Stakeholder Analysis

4. MIC Perspective

5.Preface

6.Implications for the ZTE Supply Chain

  • 6.1. Application Processor and Wireless Communication Chip
    • 6.1.1. The Current Market
    • 6.1.2. Possible Places to Transfer the Orders
  • 6.2. Radio Frequency Component
    • 6.2.1. The Current Market
    • 6.2.2. Possible Places to Transfer the Orders
  • 6.3. Operating System
    • 6.3.1. The Current Market
    • 6.3.2. Possible Places to Transfer the Orders

7. Implications for ZTE's 5G Ambitions

  • 7.1. The Denial Order Seeks to Stifle ZTE's Development Momentum by Barring the Use of American Software and Hardware
    • 7.1.1. The Incapability to Conduct Independent R&D for Core Chips and Components Has Become a Major Issue
    • 7.1.2. The U.S. is Determined to Cripple China's 5G Development, and the Shots are Being Fired at ZTE

8. MIC Perspective

9.Preface

  • 9.1. iPhone Likely to Become a Bargaining Chip in US-China Trade War

10.Impact Analysis

  • 10.1. iPhone Accounts for over 42% of the Smartphone Imports in the United States
  • 10.2. Impact on Supply Chain

11.Countermeasures

  • 11.1. Short-term Strategy: Adjust Existing Capacity to Increase Production in Taiwan
  • 11.2. Mid-to Long-Term Strategy: Increase Production Share in South/Southeast Asia

12.MIC Perspective

13. Preface

  • 13.1. Conflict Intensifies as Neither Side Willing to Make Concessions

14. Development of US and Chinese Server Industries

  • 14.1. US Dominance Challenged by China
  • 14.2. China’s Spy Chip Incidents Ignites Network Security Concerns Worldwide

15. Impact on Taiwan’s Server Industry

  • 15.1. Less Impact on Taiwanese Server Industry Chain
  • 15.2. Greater Impact on Server Industry from Network Security Concerns; Some Vendors Move Production Lines out of China

16. MIC Perspective

  • 16.1. US-China Relations Remain Tense in Near Future
  • 16.2. Limited Impact on Server Industry
  • 16.3. Chinese Spy Chip Scandal Speeds up Moving Production Lines outside China

17. Huawei Network Equipment Banned by Several Countries and Telecoms

18.Main Reasons behind Lack of Trust in Chinese Enterprises

  • 18.1. Huawei’s Global Expansion Backed by Government
  • 18.2. Chinese Enterprises’ Difficulty in Maintaining Independence under China’s Legal System
    • 18.2.1. Chinese Government’s Increased Control over Chinese Enterprises
    • 18.2.2. Chinese Government’s Legitimate Rights to Conduct Intelligence through Enterprises

19. Huawei Defends Equipment Security

  • 19.1. Huawei Asserts Ability to Manage its Security and Keep Independence from the Government
  • 19.2. Huawei Proposes Security Improvement Measurements to Win Trust of Western Countries

20. Most Enterprise Customers Still Hold on to Huawei Equipment

  • 20.1. Huawei's Biggest Loss in the Asia Pacific is the Loss of Market Share in Japan
  • 20.2. Huawei's Market Share in Europe Remains Unaffected Except BT
    • 20.2.1. Other European Operators Still Cooperate with Huawei
    • 20.2.2. Germany Government Has Security Concerns about Huawei's Technology but Not Telecom Operators
    • 20.2.3. Huawei's 5G Product Advantages Make it Difficult for Telecom Operators to Give Up Easily

21. Political Risks That Huawei May Have to Encounter in the Future

  • 21.1. Huawei Continues to Face Political Risks in the Future
  • 21.2. Governments and Operators of All Countries Have High Possibility of Expanding the Blockade
  • 21.3. ZTE Should Be Worried About the US Government Bans on All China-made Products

22. MIC Perspective

  • 22.1. The Impact on Huawei’s Brand Image is Greater than on Its Revenues

23.G20. Summit

  • 23.1. G2’s Announcements in G20 Summit
  • 23.2. US Tech Companies Sidestep Trump’s Huawei Ban

24.Short-, Medium-, and Long-term Development Trends

  • 24.1. Short-term Development: Situation Seems to Get Better
  • 24.2. Medium-term Development: To Strengthen Ties with Non-US Suppliers
  • 24.3. Long-term Development: To Construct Homegrown Industry Chain

25.Impact on the Industry

26.MIC Perspective

  • 26.1. Seek Opportunities Stemming from US Companies
  • 26.2. Help China Bridge the Gap in the Industry Supply Chain
  • 26.3. Diversify Supply Chain to Reduce Risks

Appendix

  • Glossary of Terms
  • List of Companies

List of Tables

  • Table 1: Tariffs and Prices of iPhone X in Different Countries
  • Table 2: Impact of US-China Trade War on Apple’s Taiwanese Partners
  • Table 3: Analysis of EMS Providers’ Production Sites
  • Table 4: Major US Trading Partners in 2017
  • Table 5: Bans on Huawei Equipment Worldwide

List of Topics

  • Background of the China-US trade fight and the general impact on the IT and telecom industries
  • Analysis of the impact on Taiwanese communications equipment manufactured in China for the smartphone, wireless broadband equipment, and fixed broadband equipment industries from the production value and major client perspectives
  • The implications of the China-US trade fight for the ZTE supply chain, comprising of application processors and wireless communication chips, RF components, and operating systems; the implications for ZTE’s 5G ambitions
  • Analysis of the impact on the Apple iPhone and its supply chain and includes countermeasures and strategies of stakeholders in the short-, medium, and long-term.
  • Analysis of the impact on the server industry in China, the US, and Taiwan, and includes countermeasures and strategies of stakeholders in the short-, medium, and long-term
  • The reasons and political risks behind the Huawei and ZTE bans and what Huawei has done to defend its equipment security; how enterprises around the world react or have reacted to the bans, especially those in Japan, and Europe
  • The short-, medium, and long-term development trends and the impact on the industry following the G20 Summit

Companies covered:

  • Airoha Technology
  • Alcatel
  • Alibaba
  • Altice
  • Amazon
  • Apple
  • ARM
  • ASE
  • AT&T
  • AutoNavi
  • Baidu
  • Beijing Changjiu Logistics
  • Beijing Hyundai
  • Best Buy
  • Bloomberg
  • BMW
  • Bouygues Telecom
  • British Telecom
  • Broadcom
  • BT
  • Catcher Technology
  • CNBC. Coke Cola
  • Compeq
  • Delta
  • Der Spiegel
  • Deutsche Telekom
  • Flexium Interconnect
  • Foxconn
  • Futurewei Technologies
  • Genius Electronic Optical
  • GIS
  • HiSilicon
  • HPE
  • HTC
  • Huawei. IBM. Infineon
  • Inspur
  • Inventec
  • KDDI
  • KINSUS
  • KT
  • KY
  • KYEC
  • Largan Precision
  • Lenovo
  • LG
  • Maxscend Microelectronics
  • MediaTek
  • Merry
  • Mitac
  • Motorola
  • Murata
  • NTT
  • NTT Docomo
  • OPPO
  • Optus
  • Orange
  • Panasonic
  • Pegatron
  • Play
  • Qorvo
  • Qualcomm
  • Quanta
  • Reuters
  • Samsung
  • Simplo
  • Sina
  • SKT
  • SkyCom
  • Skyworks
  • SoftBank
  • Sony
  • Spark
  • SPIL
  • Stiftung Neue Verantwortung
  • Sugon
  • Taiyo Yuden
  • TCL
  • TDK
  • TDK EPCOS
  • Telefonia Dialog
  • Telefónica Deutschland
  • Telefónica O2
  • Tencent
  • Three
  • TI
  • TIM
  • Tizen
  • TPK
  • Tsinghua Unigroup
  • TSMC
  • Unigroup Spreadtrum RDA
  • United States Census Bureau
  • Verizon
  • VIVO
  • Vodafone
  • Vodafone Hutchison Australia
  • Walsin Technology
  • WIN Semiconductors
  • Wingtech
  • Winnebago
  • Wistron
  • Xiaomi
  • Zhen Ding
  • ZTE
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