Verizon Asks Samsung To Exclude Chinese Components From The $6.6B Network Deal

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Verizon has reportedly requested Samsung to exclude any Chinese components from the $6.6 billion worth of network equipment it'll be receiving from the Korean giant over the next five years. It is the latest in a string of anti-China rhetorics coming from the US.

Samsung announced last month that it had secured a $6.6 billion network equipment deal with Verizon. It was the biggest contract Samsung Networks, the network equipment manufacturing arm of the South Korean conglomerate, had ever received as it capitalizes on Huawei's misfortunes.

The US has shut the doors on the Chinese telecommunications giant over concerns that it may turn in data of millions of American users to the Chinese government. The Trump administration has been highly vocal about its anti-China sentiments. They have gone to an extent that several Chinese companies are finding it hard to survive in the US.

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Now, it appears that American tech companies don't want to use anything remotely Chinese on their products and services either. According to reports coming from South Korea, Verizon has made such a request to Samsung. The Big Red, which is also the largest mobile carrier in the US, has requested the Korean company to not use Chinese-made components in its network equipment.

Verizon doesn't want Chinese components from Samsung

Samsung has been reportedly sourcing printed circuit boards (PCBs) for its network equipment from suppliers in China. However, it may now have to turn to an alternative supplier in order to honor Verizon's request. Domestic PCB maker ISU PETASYS is looking to tap on this opportunity, The Elec reports. The company has supplied samples manufactured at its Daegu plant in South Korea to Samsung.

ISU PETASYS already supplies PCBs to some well-known companies like Cisco and Juniper. However, it has been struggling of late. The company reportedly suffered a 24 billion won operating loss last year. A big, long-term contract from Samsung could add to its fortunes but there doesn't seem to be much of hope.

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According to an industry insider, the volume of Samsung's communication equipment is relatively small than its other networking products. So it'll be difficult for domestic PCB suppliers to turn a profit from Samsung's orders. The company already has a domestic PCB supplier in Daedeok Electronics.

However, ISU PETASYS still hopes to receive a significant amount of PCB orders from Samsung. Given that the deal with Verizon is of huge importance to the Korean company, it remains to be seen how it goes about this recent development.