Huawei and ZTE, known Chinese telecommunications equipment providers, have slowed down building 5G base stations in China. This arrives after the US tech ban, which puts uncertainty regarding its key supply chain in the near future.
Both Chinese tech giants account for over 80 percent of all base stations contracts in China. In other words, these companies are integral to the country’s transition into the newer generation of mobile telecommunications. Furthermore, the slow down in 5G infrastructure also signals that the recent US export sanction has started taking its toll on the Chinese firms. Although, this slowdown is also caused by Chinese carriers’ investment strategy with 5G.
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At the moment, Huawei and ZTE are working on re-designing a few of their 5G products. This is being done to completely remove US parts as much as possible. According to a report from Nikkei, both firms have told suppliers to slow down shipments of certain 5G base station related products back in June 2020. ZTE told a supplier to slow down shipments in June, with orders coming to a near standstill in July.
Similarly, Huawei had also stated that it changed some designs and is replacing certain equipment used in its manufacturing process. Furthermore, the monsoon season hitting southern parts of China, causing floods, have also contributed to delays in 5G base station installations in the region. For those unaware, the Trump administration is cracking down on Chinese companies like Huawei and ZTE, with its recent sanctions trying to cut off US made parts completely and disrupting their supply chain.
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