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A new U.S. export ban against Chinese mobile gear maker ZTE related to its under-the-table sales to Iran could hurt Apple ( AAPL ) chip suppliers Qualcomm ( QCOM ), Qorvo ( QRVO ) and Skyworks Solutions ( SWKS ), a Pacific Crest analyst wrote Wednesday. Regulators imposed the sanctions Tuesday, alleging that ZTE used four shell companies in China and Iran to “illicitly re-export controlled items to Iran in violation of U.S. export control laws.” The ban prohibits U.S. companies from selling to ZTE. Chinese foreign minister Wang Yi opposed the sanctions, saying that ZTE’s tech purchases support thousands of U.S. jobs, according to the AP. Chipmakers Cavium ( CAVM ), Integrated Device Technology ( IDTI ), Silicon Laboratories ( SLAB ) and Xilinx ( XLNX ) also sell to ZTE. “This approach will only hurt others without necessarily benefiting oneself,” Yi said at a new conference Tuesday. ZTE isn’t banned from selling products in the U.S. but cannot procure components from U.S. companies. U.S. firms can apply for an export license, but Pacific Crest analyst John Vinh sees the government unlikely to grant them. The development could shuffle the smartphone market. ZTE owns about 4% of the global smartphone market, Vinh wrote. Industry tracker IDC says that ZTE competes alongside Xiaomi and Huawei in the low-end to midrange smartphone market, vs. No. 1 smartphone vendor Samsung. Vinh expects short-term effects on chipmakers to be “negligible.” Longer term, he says that ZTE could lose share to Huawei, Ericsson ( ERIC ), Alcatel-Lucent ( ALU ), Nokia ( NOK ), Siemens ( SIEGY ), Xiaomi, Oppo and Lenovo. “Alternatively, ZTE could conform to the U.S. embargo list, which could result in sanctions being lifted,” he wrote. Xilinx is most at risk, with 3%-3.5% of total revenue stemming from sales to ZTE, Vinh estimates. Silicon Labs follows with 2%-2.5% of total revenue wrapped in ZTE sales. IDT, Qualcomm and Qorvo are each 2% tied to ZTE, Cavium 1%-2%, and about 1.5% of Skyworks’ sales stem from the Chinese smartphone maker. Wall Street largely yawned Wednesday, however. Midday on the stock market today , only Qualcomm stock was down, dipping a fraction. Cavium stock was up a fraction. Shares of Qorvo, Silicon Labs, Skyworks and Xilinx were all up more than 1%. Integrated Device Technology stock was up more than 2.5%. Scalper1 News
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