While the US Department of Commerce has placed sanctions on China-based telecom equipment vendor ZTE, Taiwan-based networking/communication device makers indicated that their shipments to ZTE will not be seriously impacted by the sanctions.

On March 7, the US Bureau of industry and Security added ZTE to its list of companies that are subject to specific license requirements for export, making it harder for ZTE to trade with US companies and use their related products.

However, Taiwan-based network and communications device makers said the sanctions will not seriously affect Taiwan's trade with China. Taiwan makers mostly ship-based terminal devices to ZTE, and while these devices previously featured chips from US suppliers, in recent years, price competition has pushed most Taiwan players to shift to local Taiwan chip suppliers.

The makers further explained that the focus of Taiwan in ZTE's supply chain is for PON terminal devices. Although the orders are not small, gross margins are not very high, coming in lower than the industry average for makers in Taiwan.