The aftermath of two years ago became a pawn for Sino-American technology competition
In the aftermath of the recurrence, the blockade was more severe than the sanctions imposed two years ago. The industry originally believed that the United States sanctioned ZTE two years ago after it was reconciled. The latter’s violation of the regulations to sell equipment to Iran was a trigger for the United States’ “difficulty” because individual provisions of the settlement agreement were not fully implemented. (Note: The fuse is ZTE's commitment to dismissing senior employees has not reached US expectations)
In the communications industry, there is a general analysis of the U.S. move as “a sin to add to, and no matter what,” but some experts have pointed out that ZTE did not handle it properly in the follow-up to the settlement and did not meet the requirements of the U.S. regulations before it made the U.S. relapse. The background of the incident is the trade competition and science and technology competition between China and the United States. However, whether ZTE is a scapegoat or a ghost in the heart, if it refuses to implement it, it will actually cause a more serious blow to ZTE.
Stir the optical network market to fight ZTE or a glass of water
Obviously, U.S. sanctions against ZTE have more important intentions. This article only discusses the impact of the ban at the optical communication level. ZTE Corporation has always been the world's leading communications equipment provider in terms of optical networks. According to ICCSZ data, Huawei and Ciena , Nokia, ZTE and Infinera ranked the top 5 in the global optical network equipment market in 2017, with a total share of 71%, of which ZTE ranked fourth in the world with 9% share, not only as the world's leading optical network equipment supplier, but also One of the customers most dependent on optical component suppliers, especially North American manufacturers.
From the perspective of ZTE's business, the operator's network business, which mainly involves optical network products, accounted for 59.9% of total revenue in 2017, thanks to 4G system products, domestic fixed network and bearer systems, and European wireless product revenue. Rising, it can be judged that the U.S. operator market has little impact on its optical network products. In contrast, China's Huawei ZTE has been the largest customer of North American optical device manufacturers. As the United States again called for sanctions against ZTE, its silicon giant Acacia and Oclaro, the third largest optical component of optical devices, fell 35.5% and 14.9% respectively. Finisar, Lumentum, NeoPhotonics, and II-VI are also being dragged down.
With high barriers, the global optical network equipment market is in a state of fragmentation. The most important equipment markets in China and North America are closed to each other. The world’s largest single market is dominated by Huawei, ZTE and Fiberhome. Lightcouting pointed out that the orders for Huawei's ZTE from North America's optical device factory decreased sharply in 2017. This was largely because ZTE was under investigation by the United States and Huawei's risk accumulation and accumulation. If the United States activates a refusal order prohibiting its purchase of optical devices, Huawei may well reduce the purchase of North American optical devices into cumulative stocks (Huawei is the United States’ thorn in the eye), not to mention FiberHome Communications, which is known for its localization. By then, North American optical devices will be more difficult to enter the Chinese market, and the optical device market will experience fluctuations again.
In areas outside the China-US market, Huawei ZTE benefits from the Chinese government’s external infrastructure investment, which can often provide more competitive prices, and it is easy to limit the space for rivals to compete. It may be difficult for the US market alone to provide market space for equipment vendors such as Ciena, Juniper, and Infinera. If it is refused to affect ZTE, its lost market share will not necessarily be filled by equipment vendors such as Ciena and Infinera. Loss of optical device companies such as Finisar and Lumentum.
Therefore, Shih believes that from the point of view of the optical network, the US strike against ZTE may be able to curb the momentum of the Chinese equipment manufacturers, but it cannot create more market space for its optical equipment manufacturers and optical device manufacturers.
China's optical device industry continues to improve
It should be said that sufficient market space and continuous growth in revenues provide Chinese equipment manufacturers with the capital for transformation and upgrading and the opportunity cost of continuous trial and error. Now Huawei ZTE is the leading position in global 5G competition, and the optical network market is also the leader. . Perhaps ZTE is the victim of Sino-U.S. competition in science and technology and trade. Perhaps ZTE has had to spend money on the sanctions, but at least compared with two years ago, at least China's optical device industry continues to improve.
In optical communication, we have seen the rise of domestically-produced chips, domestic shipments of 25G electric chips, shipments of domestically produced 25G optical chips, and optical device companies such as Ascension, Hisense, and Asahi Global in the global market. improve. The Ministry of Industry and Information Technology of China released the "China Optoelectronic Device Industry Technology Roadmap (2018-2022)" pointed out that the optical device industry's development goals for the next five years.
Of course, China may not be able to achieve all the goals of the “road map” by 2022. But after the sanctions, if the United States wants to raise the stick again, how many more can it be repeated?