China has been taking giant steps in its bid to becoming the global tech powerhouse but ZTE is being negatively affected by Beijing’s move to because it lacks homemade computer chips.
ZTE (ZTCOF) had been banned by the US government from purchasing accessories which includes chips from American companies. The US authorities has lifted the ban on ZTE on Thursday which now issues to them the permission to buy parts.
The Chinese President, Xi Jinping, has stated that building domestic chip industry is a key priority as far as his administration is concerned. As vast as China is technologically, it relies on foreign companies for supply of the most basic technology that is ingrained in everything.
China because of the colossal technological industries it possess uses a lot of chips. Technology Consultancy International Business Strategies said 90% of chips used in China are for foreign companies.
Although several moves have been made by big Chinese companies to by a stake in chip factories, such attempts have severally been foiled by the US government on the basis of national security.
President Xi, whose focus is on creating chips making industries, has compared the essence of chips to the function of the heart.
“No matter how big a person is, he or she can never be strong without a sound and strong heart,” he said in April, during a visit to a semiconductor factory in central China.