ZTE to spend US3B on US chipsets - Mobile World Live

ZTE to spend US3B on US chipsets

26 OCT 2010

Chinese vendor ZTE is to spend US$3 billion on chipsets from five US suppliers in the next three years as the company aims to ramp up its presence in the US market. The deals have been struck with Qualcomm, Texas Instruments, Freescale Semiconductor, Altera and Broadcom. In a statement, Mr Ye Weimin, senior VP of ZTE, said: “As a publicly traded and transparent company with more than 18.72 percent equity owned by European and American investors, we believe it is very important for ZTE to cooperate with US partners and continue to increase our investment in the US market… We are keen to deepen our relationships with both US suppliers and telecom carriers in order to meet the needs of our US customers and provide highly secure and innovative products and solutions.” The statement noted that ZTE has previously paid over US$4 billion to US vendors for “intellectual property and hardware products.” The US remains a relatively untapped market for ZTE, which so far has scored agreements to sell two devices through Verizon Wireless (one of which is the Salute, pictured). Bloomberg notes that “the company is trying to gain acceptance as a vendor in the country, where sales may have stalled because of concern that using Chinese equipment in the US communications infrastructure jeopardises national security.”

ZTE is aggressively targeting the US and European markets in an effort to become a top three handset vendor by global shipments by 2015 (up from number six today) and a top five player in the next three years. Last month the company appeared to be on track to achieve this, trumpeting a 40 percent year-on-year growth in handset shipments during the first half of 2010, with a total of 28 million devices reaching the market globally.  In the first half of 2010, ZTE shipped 17 million handsets outside of China, which represented 60 percent of total shipments. It has seen sharp growth in Europe, where volumes increased by 150 percent, with more than one million units sold in both France and the UK. 18 percent of total company operating revenue in the first half of 2010 came from European and American markets. Worldwide, ZTE expects to exceed its target this year of 80 million terminal shipments, up from 61 million last year.

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