A network security expert has claimed Chinese telecoms vendors are reliant on Western technology for building 5G equipment.
James Lewis, Senior Network Security Researcher at the Center for Strategic and International Studies, made the claim in a new report about 5G and the risks posed by Chinese vendors.
Lewis said companies such as Huawei and ZTE “can’t make products without U.S. technology”. However, the same problem doesn’t exist in reverse and Western firms can make 5G equipment, “but it is going to cost a lot more”.
Earlier this year, ZTE was banned from the US market for breaking economic sanctions banning the sale of equipment to North Korea and Iran.
The ban caused ZTE to suspend all of its operations, lending credence to Lewis’ claim Chinese vendors are reliant on Western technology.
ZTE said in an exchange filing back in May:
“As a result of the Denial Order, the major operating activities of the company have ceased,”
As of now, the company maintains sufficient cash and strictly adheres to its commercial obligations subject to compliance with laws and regulations.”
Following the payment of a $1.4 billion penalty and promise to replace its board, ZTE has since had its US ban lifted. ZTE estimated the resulting suspension of its operations cost it around $3 billion.
Only US companies are said to have the ability to manufacture data converter chips, Ethernet switch chips, and FPGAs, a special type of semiconductor chip. European and US companies also dominate in the development of small cell antenna arrays and power amplifiers.
The reliance on Western technology is, dare I say, something of a ‘Trump’ card in the trade war between the US and China.
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