China's ZTE: Main Business Operations Have Ceased Due to US Ban

  • China's ZTE: Main Business Operations Have Ceased Due to US Ban

China's ZTE: Main Business Operations Have Ceased Due to US Ban

ZTE relies on United States firms for key smartphone components, including microchips from Qualcomm and glass from Corning. The decision came after it was revealed the company allegedly made false statements to USA officials. That, joined with the existing ban on doing business with companies like Intel and Qualcomm, has threatened ZTE's future.

ZTE is one of China's largest tech companies, and yet, it's ceased all "major operating activities", according to a new public filing.

ZTE's filing noted it still had "sufficient cash" and was sticking to its commercial obligations.

We've reached out to ZTE for further comment on the matter.

The ban "will also cause damages to all partners of ZTE including a large number of US companies", ZTE's public filing states.

Saying it has improved its compliance, ZTE has asked for a stay on the ban and supplied supplemental data bolstering its case to the Commerce Department.

The company faces a shortage of crucial smartphone components due to the ban.

In response to the crisis, ZTE claims it is taking steps to rectify the internal problems which led up to the ban, and a solution to the problem.

ZTE said in a statement in April that it expected its business to be "severely impacted" by the sanctions. The Chinese mobile giant then lied to investigators when it declared the dealings had stopped.

Chinese telecom equipment maker ZTE said it has filed a request to the U.S Department of Commerce's Bureau of Industry and Security (BIS) for the suspension of a seven-year business ban.

Upon pleading guilty to conspiracy to unlawful export, obstruction of justice, and making false statements to federal investigators, it appeared ZTE was committed to making a positive change.

The company posted a press release stating it had shut down major operations due to the denial order issued by the USA government.

Last month, the US Commerce Department blocked American firms from selling parts or providing services to ZTE until 2025.

While the company admitted it fired its four employees, it did not disclose that the rest of its staff received full bonuses rather than letters of reprimand.

Those actions hit the company hard.

ZTE is continuing to communicate with the U.S.in order to revise or reverse the order.

US officials have said the decision of the BIS to impose the ban against ZTE was not related to trade policy, according to Chinese press reports.