Manufacturing News

ZTE to buy $3b US chips over 3 yrs

Chinese telecom equipment producer ZTE Corp announced it will purchase semiconductor components worth of $3 billion from five US technology companies over the next three years, China Business News reported Tuesday.

The five companies are Qualcomm, Texas Instruments, Freescale Semiconductor, Altera Corporation and Broadcom.

ZTE said in a statement that it is committed to strengthening ties with US chip vendors in order to provide competitive telecom solutions to its US customers.

The United States is now a key market of ZTE. Currently, the Chinese telecom vendor sells two products through US operator Verizon. In the first half of this year, the company achieved $4.5 billion in revenue, 18 percent of which came from the European and US markets.

ZTE's announcement came in a week after four US congressmen wrote to the Federal Communications Commission and asked the commission to consider the risks in using the network equipment provided by China's ZTE and Huawei Technologies. The two Chinese vendors are currently in talks with US telecom operator Sprint Nextel and Cricket Communications on possible device sales contracts. The letter greatly increased ZTE's sale risks in the US market.

This is the second time in the past two months that US interest groups warned the US government against the risks in purchasing Chinese-made telecom equipment. In August, a group of US senators claimed that the deal between Huawei and Sprint Nextel would create "substantial risk" and "undermine US national security".

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