ZTE Will Not Be Able To Buy Qualcomm Processors Anymore

17 Abril, 2018, 10:42 | Author: Arnold Perez
  • U.S. companies banned from selling components to ZTE		
		
	Brian Heater

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After the US placed export restrictions on ZTE in 2016 for Iran sanctions violations, China's Ministry of Commerce and Foreign Ministry criticized the decision.

ZTE has said that it will launch 5G devices in either late 2018 or early 2019, with smartphones, tablets, and customer premises equipment already under development.

Although Qualcomm's CEO Steve Mollenkopf received assurances from China's vice president during a meeting in late March that the transaction wouldn't be affected by global politics, according to the Wall Street Journal, observers are nonetheless cautioning that China could withhold approval in retaliation for US tariffs on Chinese imports.

It appears that Huawei is not the only Chinese smartphone manufacturer that is facing heavy scrutiny from United States federal agencies.

A senior department official told Reuters that ZTE, "provided information back to us basically admitting that they had made these false statements".

ZTE was similarly the subject of a 2012 investigation by the FBI and US Commerce Department after allegedly setting up a network of sub-companies to illegally export Microsoft, HP, Oracle, Dell, Cisco, and Symantec products to Iran.

ZTE phones might not be very well known or popular in Western markets, but ZTE has a lot of great devices in its lineup. In response, Qualcomm shares took a 1.25 per cent drop on Monday, while Acacia, who counts ZTE as a major customer, took a massive 35 per cent nosedive.

ZTE will probably miss shipments and lose orders on handsets and transmission equipment as a U.S. export ban leads to a lack of components for China's largest-listed telecommunications equipment manufacturer, analysts said. ZTE then went on to hide the practice.

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As punishment, the government threatened to cut off ZTE's global supply chain, which would effectively destroy the company. Instead of reprimanding ZTE staff and senior management, ZTE rewarded them. The company was also supposed to revoke the bonuses of any employees involved.

As part of the original settlement with the US, ZTE agreed to a seven year suspended denial of privileges sentence.

The Chinese company, which sells smartphones in the United States, paid $890 million in fines and penalties, with an additional penalty of $300 million that could be imposed.

This means that not only did ZTE break USA trade law and attempt to cover it up, but it is not following through with the punishments for that transgression.

ZTE agreed in March of previous year to plead guilty and pay as much as $1.2 billion for violating usa laws restricting sale of American technology to Iran. The explosion in Chinese OEMs comes down to a few things, ...

The US government has banned domestic tech companies from selling components for seven years in a move that will affect chipmakers like Qualcomm, as well as US optical companies such as Finisar.

Obviously, it has the potential to severely impact ZTE's business in a negative way. "This is going to tank their stock". Last year, AT&T pulled out of negotiations to sell Huawei phones in the USA amid pressure over national security concerns.

ZTE has sold handset devices to USA mobile carriers AT&T Inc, T-Mobile US Inc and Sprint Corp.

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