ZTE Ceases Main Business Operations After U.S. Ban

Chinese smartphone manufacturer ZTE was recently banned from sourcing components from U.S. companies by the United States Department of Commerce after it found that the company hadn’t fully complied with the terms of a settlement in a sanctions violation case that ZTE had lost back in 2016. The ban meant that among other components, ZTE could no longer source smartphone processors from Qualcomm. ZTE today confirmed that its main business operations have ceased following this ban.

ZTE confirmed in an exchange filing that its main business operations have ceased after the ban but that it’s working to have the ban modified or reversed. It was reported earlier this week that Chinese officials have also raised the matter with their U.S. counterparts and are pushing for a relaxation in the ban.

The ban also opened up the possibility that ZTE may even lose its Android license. So even if it decided to source processors from other companies such as MediaTek or Samsung, it might not be able to license Android from Google, which would effectively be the final nail in the coffin of its smartphone ambitions.

“As of now, the Company maintains sufficient cash and strictly adheres to its commercial obligations subject to compliance with laws and regulations,” the company said in its filing, adding that as a result of the ban, “major operating activities of the Company have ceased.”

Adnan Farooqui
Categories: Cellphones
Tags: ZTE