Monday, December 6, 2021
اُردُو نیوز Newspaper Live-TV(UK) Live-TV(PK)
اُردُو نیوز Newspaper
Live-TV(UK) Live-TV(PK)

Oclaro, other component makers slide after US curbs on China's ZTE

Oclaro, other component makers slide after US curbs on China's ZTE
March 9, 2016
BEIJING - Little-known San Jose optical-parts maker Oclaro became the face of a US ban as its shares led telecom-components makers lower over restrictions on selling components to China's ZTE Corp. Shares of Oclaro, the rare component maker to issue a statement on the expected effect of the restrictions, slumped 15.4 percent. Oclaro sells multiple products to ZTE, a maker of mobile devices and telecoms systems. The US Commerce Department on Monday imposed the export restrictions on the Chinese telecommunications equipment maker for alleged Iran sanction violations, and experts said they are likely to disrupt ZTE's sprawling global supply chain. In a statement released after market close Tuesday, chipmaker Integrated Device Technology Inc. said the Commerce Department's ruling "could cause changes to revenue trends" in its quarter ending July 3, but would have "minimal" impact to its current quarter ending April 3. Earlier, IDT shares fell 1 percent. Among other suppliers whose shares fell were Lumentum, down 3.3 percent; NeoPhotonics Corp, down 8.6 percent; Fabrinet, down 5.3 percent; Finisar Corp, down 7.7 percent; Inphi Corp, down 7.3 percent; and Skyworks Solutions Inc, down 4.1 percent. ZTE distributor Avenet fell 1.5 percent. Qualcomm Inc., which supplies high-end chipsets for ZTE phones, slid 1.58 percent. Earlier Tuesday, shares of Taiwanese Qualcomm rival MediaTek Inc rose 3 percent. Any switch by ZTE to replace Qualcomm as a supplier might take several months, because of the need to work out need specifications, IHS analyst Wayne Lam said. “They would have to redesign their whole phone, the board, the core electronics, the antenna, everything,” Lam said, adding that the process would slow ZTE’s efforts to catch up with stronger players, such as Huawei, in China’s smartphone market. Some analysts saw the biggest potential for fallout at US suppliers around ZTE's telecommunications-infrastructure equipment rather than its handset business. "I am far more worried about the optical transceiver companies," said IHS analyst Dan Panzica, citing companies like Finisar and NeoPhotonics. Oclaro was created in 2009 after the merger between Avanex Corp., a Fremont, Calif., photonics company, and Bookham Inc., a San Jose, Calif., optical maker with British roots. It said Tuesday that ZTE is expected to account for more than 10 percent of its revenue in the quarter ending March 26. It now expects revenue for the quarter to come in at the lower end of its prior forecast of $97 million-$103 million. Analysts on average were expecting revenue of $100 million, according to Thomson Reuters I/B/E/S. Trading in Oclaro's shares on Tuesday was more than three times the company's 30-day moving average, with more than 10 million shares traded. The shares closed down 73 cents at $4. "Oclaro is currently reviewing the impact of this action by the Department of Commerce on our ability to continue to ship products to ZTE and intends to fully comply with the Department's final rule," the company said in its statement. Under the terms of the restrictions, in addition to the ban on US manufacturers selling components to ZTE, foreign manufacturers cannot sell products containing a significant amount of US-made parts to the Chinese company. The Commerce Department investigated ZTE for alleged export-control violations following Reuters reports in 2012 that the company had signed contracts to ship millions of dollars worth of hardware and software to Iran's largest telecoms carrier, Telecommunication Co. of Iran, as well as a unit of the consortium that controls it. -Reuters