Tencent chairman pledges to advance China chip industry after ZTE ‘wake-up’ call

Tencent Holdings chairman pledged to advance China's semiconductor industry, saying the blow to ZTE Corp from Washington's ban on US firms supplying telecommunications company was a “wake-up” call, local media reported.

China's No.2 telecom equipment maker ZTE was banned in April from buying US technology components for seven years for breaking an agreement reached after it violated US sanctions against Iran and North Korea. American firms are estimated to provide 25-30 percent of the components used in ZTE's equipment.

While the US administration said on Friday it had reached a deal to put ZTE back in business after the company pays a $1.3 billion fine and makes management changes, the plan has run into resistance in Congress, indicating ZTE was still far from out of the woods. Also, ZTE is yet to confirm the deal.

“The recent ZTE incident made everyone more clearly realise that however advanced one may be in mobile payment, without the mobile, the chips and the operating system, you still cannot compete,” Chinese media reports cited Tecent's Pony Ma as saying at a forum in Shenzhen on Saturday.

Tencent, which alternates with Alibaba Group to be Asia's most-valuable listed company, is the largest social media and gaming company in China and operates the popular WeChat app.